Audit
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An audit is an evaluation of an organization, system, process, project or product. It is performed by a competent, independent, objective, and unbiased person or persons, known as auditors. The purpose is to make an independent assessment based on management's representation of their financial condition (through their financial statements). Another purpose of the audit is to ensure the operating effectiveness of the internal accounting system is in accordance with approved and accepted accounting standards, statutes, regulations, or practices. It also evaluates the internal controls to determine if conformance will continue, and recommends necessary changes in policies, procedures or controls. Auditing is a part of some quality control certifications such as ISO 9000.
Audits evaluate conformance now and into the future. An inspection evaluates conformance in the past. Both are important parts of management.
Financial Audit
An important type of audit is the financial audit. It is designed to determine whether financial statements are fairly presented in accordance with Generally Accepted Accounting Principles (GAAP). Financial audits are required for publicly registed companies, created by the implementation of the Securities Exchange Acts in 1933 and 1934. In addition to the public companies, audits are performed for private companies, registered charities and some government/public bodies.
Government financial reports are not always audited by outside auditors. Some governments have elected or appointed auditors.
Audit 1 is an important capstone class in many undergraduate Accounting programs.
See also
Some examples are:
- Academics audit
- Clinical audit
- Computer security audit
- Configuration audit (as part of configuration management)
- Conformity assessment audit (ISO, HACCP, JCAHCO)
- Environmental audit
- Financial audit (the oldest)
- Information technology audit
- Internal audit
- Management system audit (quality audit, safety audit, environmental audit)
- Performance audit
- Scientology counselling. See Auditing (Scientology).
- Security Audit (not computer-related)
- Software audit
- Telecommunication audit
