Auditing
What Is an Audit? (With Definition, Types and Purposes) Updated February 4, 2023An audit is a detailed examination or inspection of a company's or individual's financial records and accounting documents. Although most audits are performed on companies' finances so they can learn about their financial health and success, there are several additional types of audits. Understanding what they are and the purposes they serve can help companies and professionals decide whether they want to perform an audit and how it may benefit them.In this article, we define what an audit is, examine the various types of audits and discuss the purposes of completing them. Strengthen your profile What are your desired job types? What are your desired job types?*Full-timePart-timeContractTemporaryShow all (1 more)Save What is an audit? An audit is an evaluation process that involves performing an inspection of documents to confirm the accuracy of an organization's or individual's financial statements. Following an initial examination of financial records, an auditor performs physical checks on inventory and makes sure that the professional or company records transactions correctly.Audits can serve a variety of purposes. For example, a company may request an internal audit to learn more about its financial situation, or an external financial contributor may request an external audit to ensure the organization reports information accurately. Related:Learn About Being an Auditor Types of audits Types of audits vary from organization to organization. For example, a construction company may conduct an audit to analyze project expenses or contractor costs. Here are some different types of audits: Internal audits A company's employee conducts an internal audit and then reports their findings to an audit committee, made up of the board of directors. Internal audits can help a company define areas for improvement while providing necessary information to reach company goals.While an external audit usually focuses…