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 ?
For example, transactions and events audited for the current year may well provide evidence concerning the reaudit year's financial statements.
While the taxpaying public at large benefits, the incremental inconvenience to the audited taxpayer is severe, as can be the incremental costs.
The DIF formulas used to determine which returns should be audited are updated using information received from the TCMP.
Since management reports are typically included in companies' annual reports, which contain audited financial statements, the auditor is required to read them.
104-44 and/or a historical lack of DOL enforcement efforts may explain why welfare plans that should be audited have not been audited in the past.
Moreover, the audit committee must state whether it recommended to the board that the company include its audited financial statements for the previous fiscal year in the company's annual report to the SEC on form 10-K.
Having been audited and having done auditing, I saw how painful and disruptive it could be.
Ultimately, the dental plans would like to be able to share audit results so that the same dentist need never be audited more than once in the same year by different plan auditors," said Dr.
The auditee also has several, more extensive reporting requirements, many of which must be audited.
The IRS selection process for choosing tax returns to be audited has changed in the last several years from one based largely on statistical scoring to a more selective and specialized process.
If the plan is later audited by the IRS, the administrators need only show their documentation of the error and its correction.
A not-for-profit organization since 1931, BPA International are media auditing experts -- the preferred global provider of audited data for the marketing and media/information industries.