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Audit

Audit (Definition)​

An audit is an independent examination and evaluation of an organizations financial records, transactions, and internal controls. It is typically conducted by a qualified professional to ensure accuracy, compliance, and fair representation of financial information.

Key aspects of audits include:

  1. Can be internal (conducted by employees) or external (performed by independent auditors)
  2. Aims to verify the accuracy and completeness of financial statements
  3. Assesses compliance with accounting standards and regulations
  4. Identifies weaknesses in internal control systems
  5. Provides assurance to stakeholders about the reliability of financial information
  6. Can be mandatory for certain types of businesses or voluntary
  7. Results in an audit report expressing an opinion on the financial statements Audits play a crucial role in maintaining financial transparency, detecting errors or fraud, and building trust with stakeholders.