DEFINITION of 'Auditability'

The ability to achieve accurate results in the examination of a company's financial reporting. Auditability is dependent upon the company's financial recording practices, the transparency of the company and the forthrightness of the managers who interact with the auditors. A company with a great deal of transparency and complete records has greater auditability than a company whose records are incomplete and whose managers are evasive.

BREAKING DOWN 'Auditability'

Auditability is an important factor in the auditing process. An audit is most effective when auditors are given access to the correct financial information. A company that is considered auditable allows auditors to do a more thorough and accurate assessment of the company's financials.

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  1. Does working capital include salaries?

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  2. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  3. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  4. Are dividends considered an expense?

    Cash or stock dividends distributed to shareholders are not considered an expense on a company's income statement. Stock ... Read Full Answer >>
  5. Do dividends go on the balance sheet?

    The only account recorded on the balance sheet, when dividends are declared and before they are paid out to a company's shareholders, ... Read Full Answer >>
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