AUDIT Definition

Bookmark and Share

AUDIT is the inspection of the accounting records and procedures of a business, government unit, or other reporting entity by a trained accountant for the purpose of verifying the accuracy and completeness of the records. It could be conducted by a member of the organization (internal audit) or by an outsider (independent audit). A CPA audit determines the overall validity of financial statements. A tax audit (IRS in the U.S.) determines whether the appropriate tax was paid. An internal audit generally determines whether the company's procedures are followed and whether embezzlement or other illegal activity occurred.

Learn new Accounting Terms

INTERNAL CONTROL SYSTEM is a formalized system intended to provide reasonable assurance that the objectives of a program as a whole are met, e.g. financial control, quality control or process control.

PURCHASE RETURNS is a contra purchase account that records all credits from returned inventory purchases.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.