The term “audit” was coined during the Medieval period, particularly in 12th–13th century England. The word “audit” comes from the Latin word “audire,” meaning “to hear.”
In early civilizations, financial records were read aloud to an independent person. That person would listen, question discrepancies, and validate the accuracy of accounts. “Audit” literally began as a verbal verification process. This practice gave rise to the term “audit,” meaning a formal hearing of accounts.
From its early origins to the present day, the term audit has become central to corporate life. In many organizations, almost every process, control, and decision framework ultimately aligns with audit requirements.
I strongly believe in auditing because when an audit raises no significant observations, it is a clear indication that systems, processes, and employees are functioning effectively. In that sense, an audit is not merely a compliance exercise—it is a validation of operational discipline.
This blog stems from a personal experience. In one instance, a proposal I put forward was declined, not because it lacked merit or didn’t sound operational, but because of the anticipation that it might attract an audit observation.
Below is A Real Situation That Made Me Reflect
In one instance, we had two ongoing work arrangements with the same vendor.
Work 1– Covered under PO X (valid)
Work 2 – Covered under PO Z (expired)
Vendor – Same in both cases
An urgent requirement arose under Work 2, but the corresponding purchase order (PO Z) had already expired. Meanwhile, PO X was still valid. Given the operational urgency, I proposed a temporary solution: execute the urgent work and adjust the equivalent amount from penalty amount under PO X means deduct less penalty (equivalent to service cost of work in PO Y) in PO X . For example work value in PO Y is 10 rs, and deduction amount for one billing cycle in PO X is 30 rs. Then we can adjust 10 rs. and instead of 30 we should deduct 20 rs. in PO X. The intention was not to bypass controls, but to prevent operational delay while maintaining financial neutrality. However, the proposal was declined immediately — primarily due to the anticipation that such an adjustment might attract an audit observation.
The Core Reflection
I acknowledge that the suggested approach was not aligned with standard procedure. It required discussion, documentation, and appropriate approvals before implementation.
But what concerned me was not the rejection itself — it was the speed of rejection driven by audit anticipation rather than structured evaluation.
Instead of asking:
Can we formalize this through approval?
Can we document the justification?
Can we regularize it through amendment?
The discussion ended at :> It may become an audit point.
The example shared here is not an isolated incident. It is one of several instances where ideas were set aside, not after structured evaluation, but at the very first mention of a possible audit observation.That pattern raises an important question:
Is audit a source of fear, or is it a governance tool?
If audit becomes a psychological barrier that discourages discussion then its purpose is being misunderstood. Audit was never designed to suppress initiative. It exists to ensure accountability, transparency, and compliance.
This raises a simple question:
Is audit meant to create fear, or is it a tool to strengthen systems?
PS : leave comments if it resonates woth you.
Blogpost's By Anoop 