Audit

AAA

DEFINITION of 'Audit'

1. An unbiased examination and evaluation of the financial statements of an organization. It can be done internally (by employees of the organization) or externally (by an outside firm).

2. An IRS examination of a taxpayer's return or other transactions. The IRS performs this examination to verify the accuracy of these filings.

INVESTOPEDIA EXPLAINS 'Audit'

1. Auditors ensure the fiscal accuracy and responsibility of organizations.

2. This is the ultimate fear of nearly every taxpayer.

RELATED TERMS
  1. Substitute Return

    A tax filing that the IRS will create for a taxpayer in order ...
  2. Attest Function

    The process of independent review of the validity of data audited ...
  3. Correspondence Audit

    Tax audits that the IRS performs by mail. Correspondence audits ...
  4. Revenue Act Of 1862

    This act increased taxes and implemented the first federal income ...
  5. Independent Auditor

    A certified public accountant who examines the financial records ...
  6. Auditor's Report

    Recorded in the annual report, the auditor's report tests to ...
RELATED FAQS
  1. How are contingent liabilities reflected on a balance sheet

    Contingent liabilities need to pass two thresholds before they can be reported in the financial statements. First, it must ... Read Full Answer >>
  2. What is the difference between a compiled and a certified financial statement?

    All publicly-traded companies are required to provide financial statements, including a balance sheet, cash flow statement ... Read Full Answer >>
  3. How do I perform a financial analysis using Excel?

    Investors can use Excel to run technical calculations or produce fundamental accounting ratios. Corporations use Excel to ... Read Full Answer >>
  4. Which accounting cycle is best for my business?

    Most accounting resources suggest that there are between five and eight different accounting transaction cycles, each of ... Read Full Answer >>
  5. What are the pros and cons of using the fixed charge coverage ratio?

    One main advantage of using the fixed-charge coverage ratio is it provides a good, fundamental assessment for lenders or ... Read Full Answer >>
  6. What are the disadvantages of using the sinking fund method to depreciate an asset?

    Using the sinking fund depreciation definitely impinges on a company's cash flow and profitability during the depreciation ... Read Full Answer >>
Related Articles
  1. Insurance

    The Challenging Role Of The Corporate Treasurer

    Corporate treasury management has evolved from an offshoot of accounting to a more specific and strategic career.
  2. Professionals

    Trying On Potential Employers

    Ditch your ego, prove that you'll work hard and don't settle for the wrong company.
  3. Retirement

    Tax Tips For The Individual Investor

    We give you seven guidelines to help you keep more of your money in your pocket.
  4. Taxes

    How To Appeal Your IRS Audit

    The auditor's review isn't always the last word. Many taxpayers who are audited can successfully appeal their audits and save thousands of dollars.
  5. Taxes

    Deducting Your Donations

    Generosity may be its own reward, but some charitable giving also provides personal tax benefits.
  6. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  7. Options & Futures

    Facing Co-Op Bankruptcy

    Co-op investors can often be penalized for other people's actions. Read on to learn about the most common types of co-op default.
  8. Retirement

    Avoid An Audit: 6 "Red Flags" You Should Know

    Don't make yourself a target - steer clear of these attention-grabbing tax-filing practices.
  9. Taxes

    Tax Court: Your Last Resort

    Appealing an unfavorable or unfair tax ruling may be your last chance to save your finances.
  10. Options & Futures

    Uncovering A Career In Forensic Accounting

    Does a job as a financial sleuth sound interesting to you? Dig in to learn more.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center