Audit
An independent examination of financial statements, internal controls, or compliance to provide assurance on reliability, designed to enhance stakeholder confidence.
Audit
An independent, systematic examination of financial statements, records, operations, or systems, conducted to provide an opinion or assessment regarding their accuracy, reliability, and compliance with established criteria.
For instance, a public company’s annual financial statement audit involves independent CPAs examining accounting records, testing transactions, evaluating controls, and performing analytical procedures to issue an opinion on whether financial statements fairly present the company’s financial position and results according to applicable accounting standards.
Various audit types serve different purposes: financial statement audits assess fair presentation of financial information; internal audits evaluate operations, controls, and risk management; compliance audits verify adherence to laws, regulations, or policies; operational audits evaluate efficiency and effectiveness; and forensic audits investigate suspected fraud or financial misconduct. While financial statement audits follow standardized professional standards, other audit types may vary in scope and approach based on specific objectives. All audits typically follow a systematic process of planning, risk assessment, evidence gathering, evaluation, and reporting, with findings and recommendations communicated to appropriate stakeholders.