an Audit
Financial Dictionary — Auditing
Definition
An audit is an independent examination of accounting, financial records and financial statements to determine whether they are in compliance with International Financial Reporting Standards (IFRS) law and standards for countries of the world or Generally Accepted Accounting Principles (GAAP) for the United States of America.
Detailed Explanation
An audit is an independent examination of financial statements and underlying records to provide reasonable assurance they are free from material misstatement and prepared in accordance with a reporting framework (e.g., IFRS or GAAP).
Common Uses
- Used in audit planning to understand risks and design procedures.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
Practical Example
- Example: The auditor references **an Audit** when designing procedures and documenting conclusions in the audit file.
Why This Term Matters
- Why it matters: Supports high-quality, defensible audit conclusions and helps detect material misstatements and control weaknesses.