Audit

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Audit

An examination of a company's accounting records and books conducted by an outside professional in order to determine whether the company is maintaining records according to generally accepted accounting principles. See: accountant's opinion.

Audit

1. The process of reviewing activities to identify inefficiencies, reduce costs, and otherwise achieve organizational objectives. Audits may investigate potential theft or fraud and ensure compliance with applicable regulations and policies. They also help ensure the accuracy of reports. Audits are an essential part of a company's efficiency.

2. In taxation, the process in which the tax collection agency reviewing the reports of an individual or company to see if all income, deductions, and/or credits reported accurately reflect reality. This is done to ensure that each individual or company pays his/her/its full tax liability. Audits are conducted on a random basis, or when something appears remiss on a tax return. See also: Tax avoidance, Tax evasion.

audit

An examination of an organization's financial documents in order to determine whether the records and reports are valid and the information is fairly presented. An independent audit is usually conducted by a Certified Public Accountant who then issues an opinion as to whether the statements accurately and fairly represent the firm's operations and financial position. See also external audit, internal audit.

Audit.

An audit is a professional, independent examination of a company's financial statements and accounting documents following generally accepted accounting principles (GAAP).

An IRS audit, in contrast, is an examination of a taxpayer's return, usually to question the accuracy or acceptability of the information the return reports.

audit

  1. the legal requirement for a JOINT-STOCK COMPANY to have its BALANCE SHEET and PROFIT-AND-LOSS ACCOUNT (the financial statements) and underlying accounting system and records examined by a qualified AUDITOR, so as to enable an opinion to be formed as to whether such financial statements show a TRUE AND FAIR VIEW of the company's state of affairs and that they comply with the relevant statutes. Auditing involves inspecting documentary evidence of transactions such as INVOICES, STATEMENTS and DELIVERY NOTES to ensure that the DOUBLE-ENTRY accounting entries are complete and authentic.

    Where the auditor is satisfied that the financial statements show a ‘true and fair view’ he will report this to the SHAREHOLDERS in the ANNUAL REPORT AND ACCOUNTS. However, if he is not satisfied that the financial statements show a ‘true and fair view’ or he is unhappy about any explanations given by the managers, then he may make a ‘qualified report’ to the shareholders expressing his precise misgivings.

  2. internal audits of accounting procedures, marketing activities, production operations, quality control systems, and safety may be undertaken to monitor and review the efficiency and effectiveness with which these various activities are undertaken. In addition, a company may undertake a value-for-money audit, to evaluate whether the organization is operating effectively. See also MARKETING AUDIT.

audit

the legal requirement for a JOINT-STOCK COMPANY to have its BALANCE SHEET and PROFIT-AND-LOSS ACCOUNT (the financial statements) and underlying accounting system and records examined by a qualified auditor, so as to enable an opinion to be formed as to whether such financial statements show a true and fair view and that they comply with the relevant statutes. See also ENVIRONMENTAL AUDIT, VALUE FOR MONEY AUDIT.

Audit

An IRS examination and verification of a taxpayer's return or other transactions with tax consequences. An office audit is an audit by the IRS that is conducted in the agent's office. A field audit is conducted by the IRS on the business premises of the taxpayer or in the office of the tax practitioner representing the taxpayer.
References in periodicals archive ?
IF THE REAUDITOR IS UNABLE TO GATHER EVIDENCE by reading prior audited financial statements and reviewing the predecessor's audit documentation, it should take appropriate alternative steps including analytical procedures and a review of post-balance-sheet transactions.
4% of all audited returns are for "Related Returns to the one selected" which means that about 1 out of 5 audited returns are for tax returns other than the principal audit year.
The percentage of expenditures to be audited is reduced to 25% for low-risk organizations.
A: No, the master trust's financial statements do not have to be audited.
We have audited the accompanying consolidated balance sheets of Philip Morris Companies Inc.
If the audited entity adjusts the financial statements based on the material questioned costs, the auditor should issue an unqualified opinion and should consider discussing the adjustment in an explanatory paragraph following the opinion.
Monk: When a nonissuer's financial statements have been audited in accordance with GAAS and PCAOB auditing standards, users of the auditor's report may erroneously believe the entity and the auditor are in compliance with the entire system of PCAOB and SEC regulations--that is, quality control, ethics and independence standards.
Some of the recommendations also may be of interest to accountants employed by or serving companies and organizations that do not prepare audited financial statements.
The ASB believes this exposure draft will improve audit practice and is responsive to the issues that have been raised by regulators and others who use and rely on audited financial statements of non-issuers.
securities markets, and so those companies must also follow many of the requirements of the Sarbanes-Oxley Act, including the requirement to file financial statements audited by a registered public accounting firm with the SEC.
Currently, when a company wants to examine its underwriting, it resorts to an internal process where the audit is conducted by the very folks being audited, or alternatively, the audit responsibility falls upon the company's reinsurers.