Board of directors' audit committees are becoming an increasingly popular vehicle for enhancing the objectivity and independence of auditors and overseeing the financial information generating process. This is occurring at a time when directors and auditors are facing criticism and increased litigation due to corporate failures and disclosures of illegal or questionable payments.

This article examines the workings of a corporate audit committee that operated in the mid-nineteenth century. The committee functioned as “auditor” for the company since there was no established public accounting profession in the U.S. at that time. They disentangled the financial affairs of the company and probably directly contributed to the replacement of the President of the company. Although the activities of corporate audit committees have changed or evolved considerably through the years, both the 1870 corporate audit committee and modern corporate audit committees have pursued a common goal of achieving accuracy and completeness in corporate financial reports.

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