Audit

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Related to audits: Environmental audits

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 ?
With respect to privacy audits in traditional organizations, a key control is the organization's record-keeping system; in particular, records professionals and their duties related to information used by the organization.
As one EPA official recently told State Environmental Monitor, enforcement actions often depend on "tips and confidential sources," and if this type of information becomes privileged -- so that employees' testimony about an audit is unusable -- enforcers' jobs become tougher.
Further, a private accounting firm audits the Board's balance sheet, and the Board's Inspector General audits the effectiveness and efficiency of Board programs and operations under the Inspector General Act of 1978 as amended.
The marketing audit is simply a systematic and comprehensive review and evaluation of your marketing performance.
Provides role-based, read-only access to audited database information, preventing tampering of secure audit data.
Practices vary and may involve a combination of both computer-assisted audit programs and manual procedures.
Commission Vice President Alan Skobin, the civilian board's liaison to LAPD's anti-terrorism unit, said he became aware the audits were not being done about a year ago.
The MTC needs further information on whether there is a problem with states accepting audits and assessing the taxpayer all at the same time.
Overcharges exceeding a threshold (commonly 13%) require tenant's audit cost to be reimbursed.
Section 202--Preapproval Requirements: All auditing services (including provision of comfort letters for securities underwritings or statutory audits required for insurance companies for state law purposes) and nonaudit services, other than nonaudit services that meet a de minimis exception, are subject to preapproval by the issuer's audit committee.
The legislation, signed by President Bush on July 30, 2002, applies to all publicly held companies, their audit firms, and all actively working auditors.
Many professionals now believe that the Sarbane-Oxley law will eventually demand that external, independent underwriting audits be completed just as other financial audits are required.