The original Auditor in Texas government was created under the Republic of Texas in December of 1835 by the same law that created the Comptroller. Within the Auditor's office were a First Auditor's Office and a Second Auditor's Office. A short-lived Auditorial Board, composed of the First and Second Auditors and the Comptroller, was created in 1839 to audit claims made against the Republic. The Auditor received separate appropriations throughout the Republic and the first few years of statehood, but by the mid 1850s the appropriations disappeared and the auditorial functions were taken over by the Comptroller. In 1866 a second "Auditorial Board," composed of the Treasurer and Comptroller, was created to audit claims. This second board appears to have functioned until approximately 1874. Throughout the 1800s the Texas Auditor was responsible for fiscal matters, particularly claims against the state.

The current Texas State Auditor's Office, with which the records listed below are concerned, has a character and purpose that differs substantially from its earlier incarnation. The modern office was created in 1929 by House Bill 170, 41st Legislature, First Called Session, providing for a State Auditor and Efficiency Expert who was to be the investigator of all custodians of public funds and disbursing officers in Texas. The Auditor was to inspect all books and records of all state departments, officers, and institutions of the state. He/She was also to examine the activities and duplication of effort of each state body and to produce a report discussing the efficiency of subordinate employees, the status and condition of public funds, the duplication of work, and the bookkeeping practices of each of those bodies. The reports were to be completed no later than 30 days before each legislative session. The auditor was to be a certified public accountant with five years of experience who was appointed by the Governor for a two year term with the consent of the Senate. The auditor could have assistants.

In 1943 (Senate Bill 27, 48th Legislature, Regular Session), the 1929 legislation was repealed, with the exception that the auditor and assistants should continue to exercise the functions of the office until a State Auditor was appointed and qualified under the terms of the new act. The new legislation created the Legislative Audit Committee composed of the Speaker of the House, the Chair of the House Appropriations Committee, the Chair of the House Revenue and Taxation Committee, the Lieutenant Governor, the Chair of the Senate Finance Committee, and the Chair of the Senate Committee on State Affairs. The Committee was to appoint the State Auditor, with the approval of the Senate. The auditor was still to be appointed every two years and to have the same personal qualifications. The Auditor was also to retain the same basic functions, namely to examine, audit, and help improve all state accounting and bookkeeping procedures and to investigate the efficiency and quality of services provided by all state bodies and agencies. The auditor was to issue annual reports to the Governor and Legislature containing specific recommendations for improvements in the areas falling within the jurisdiction of the Auditor's Office.

The 1943 legislation was revised in 1987 (House Bill 699, 70th Legislature, Regular Session), altering the powers and duties of the office. The Auditor must conduct audits of all departments, including institutions of higher education, as specified in the audit plan (at the direction of the Legislative Audit Committee). The Auditor must also conduct an audit or investigation of any entity receiving funds from the state. The audits must be conducted in accordance with accepted auditing standards as prescribed by the American Institute of Certified Public Accountants, the Governmental Accounting Standards Board, the United States General Accounting Office, or other professionally recognized entities that prescribe auditing standards. The Auditor determines the audit plan for the state for each fiscal year, considering recommendations concerning coordination of agency functions made by a committee composed of the Legislative Budget Board, Sunset Advisory Commission, and State Auditor's Office. The plan, which must be reviewed and approved by Legislative Audit Committee, will provide for auditing of federal programs at least once in each fiscal biennium and ensures that audit requirements of all bond covenants and other credit or financial agreements are satisfied. The Auditor may at any time require the assistance of the administrative head, official, auditor, accountant, or other employees of the entity being audited or investigated and is entitled to access to all records books, accounts, confidential or non-confidential reports, vouchers, or other records of information in any department entity subject to audit - including electronic data. Finally, the Auditor may conduct financial audits, compliance audits, economy and efficiency audits, effectiveness audits, special audits, and investigations as defined in the Texas Government Code, Chapter 321; and if the Auditor decides a change in an accounting system is necessary, the Auditor shall consider the present system of books, records, accounts, and reports to ensure that the transition will be gradual and that the past and present records will be coordinated into the new system.

By the late 1990s the Auditor's Office had 254 employees and a budget of over $12 million. The office provides independent audit services for Texas citizens and government leaders to improve accountability in state agencies and universities. The staff is organized in a team-centered project-driven manner and the organizational structure consists of an executive team, a manager team, project teams composed of staff drawn from an audit pool, and administrative services teams.

The State Classification Office is an entity within the Auditor's Office. It was created as the result of the Texas Legislature's desire for the Texas Employment Commission to perform a classification study to recommend equitable state salaries to the Legislature's 56th Session (Senate Concurrent Resolution, 55th Legislature, Regular Session, 1957). By 1959 the Commission had been unable to complete the classification. The Legislature ordered it to continue its study and requested the Governor and the Legislative Budget Board to recommend draft legislation to the 57th Legislature to address the installation, maintenance, and administration of classification salary plans using the Employment Commission documents as the basis for further work (House Concurrent Resolution, 56th Legislature, Regular Session). The State Classification Office of the State Auditor's Office was, thus, created by the Position Classification Act in 1961 (House Bill 189, 57th Legislature, Regular Session). The Office was to advise and assist agencies and universities in effectively managing their human resources by providing tools, educational services, and feedback on progress toward the achievement of goals. The office revises state job descriptions, prepares employee leave interpretations, and human-resource technical updates, and is responsible for determining and reporting statewide turnover rates and the number of full-time equivalent employees.