Audit

Audit

An audit is a systematic examination of financial statements, records, and operations of an organization to ensure accuracy, compliance with accounting standards, and the effectiveness of internal controls. Audits can be conducted internally by the organization itself or externally by independent auditors.

The primary purpose of an audit is to provide assurance that the financial statements present a true and fair view of the organization’s financial position. This process involves assessing the validity, reliability, and completeness of financial information.

For example, a company might undergo an annual external audit where an independent CPA firm reviews its financial statements and supporting documentation. The auditors then express an opinion on whether the financial statements are free from material misstatement, which enhances the credibility of the financial information provided to stakeholders.