Audit

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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.

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BREAKING DOWN 'Audit'

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

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

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