2 a student who attends a course but does not take it for credit
3 a qualified accountant who inspects the accounting records and practices of a business or other organization
- English: auditor
The most general definition of an audit is an evaluation of a person, organization, system, process, project or product. Audits are performed to ascertain the validity and reliability of information, and also provide an assessment of a system's internal control. The goal of an audit is to the person/organization/system etc. under evaluation based on work done on a test basis. Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements - a concept influenced by both quantitative and qualitative factors.
Traditionally audits were mainly associated with gaining information about financial systems and the financial records of a company or a business (see financial audit). However recently auditing has begun to include other information about the system, such as information about environmental performance. As a result there are now professions that conduct environmental audits.
In financial accounting, an audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. It is performed by competent, independent and objective person or persons, known as auditors or accountants, who then issue an auditor's report on the results of the audit.
Such systems must adhere to generally accepted standards set by governing bodies that regulate businesses. It simply provides assurance for third parties or external users that such statements present 'fairly' a company's financial condition and results of operations.
Quality auditsQuality audits are performed to verify the effectiveness of a quality management system. This is part of certifications such as ISO 9001.
Integrated auditsIn the US, audits of publicly-listed companies are governed by rules laid down by the Public Company Accounting Oversight Board (PCAOB). Such an audit is called an Integrated Audit, and auditors have the additional responsibilities of expressing opinions on management's assessment of the firm's internal control, and on the effectiveness of internal control over financial reporting based on their (the auditors') own assessment. These requirements are
Types of auditorsThere are two types of auditors: ''
- Internal auditor are employees of a company hired to assess and evaluate its system of internal control. To maintain independence, they present their reports directly to the Board of Directors or to Top Management. They provide functional operation to the concern. Internal Auditors are employees of the company so that they can easily find out the frauds and any mishappening.
- External auditor are independent staff assigned by an auditing firm to assess and evaluate financial statements of their clients or to perform other agreed upon evaluations. Most external auditors are employed by accounting firms for annual engagements. They are called upon from the out side of the company.
Major auditing firmsThe four largest accounting firms in the world are collectively referred to as the Big Four. They are as follows:
- PricewaterhouseCoopers, also known as PwC
- Ernst & Young, also known as E&Y
- KPMG, formerly known as Klynveld Peat Marwick Goerdeler
- Deloitte Touche Tohmatsu, also known as Deloitte
In the UK the medium sized firms are also referred to as mid-tier. Many of these firms are international and increasingly are competing for work against the Big Four, especially following the recent large auditing scandals.
Auditing firms around the world
While the four major audit firms listed above provide audit services to the largest corporations in America, audit firms around the world are also in partnership with the Big Four. Since corporations held offices in other parts of the world, they tend to be audited by affiliates of the Big Four to maintain consistency and uniformity in their application of auditing standards.
- Academic audit
- Auditor's report
- Single Audit
- Audit risk
- Clinical audit
- Computer security audit
- Conformity assessment audit (ISO, HACCP, JCAHCO)
- Environmental audit
- Financial audit (the oldest)
- Information technology audit
- Internal audit
- Performance audit
- Scientology auditing
- Software audit
- Telecommunication audit
- Audit Planning and Controls
- Benford's Law
auditor in Afrikaans: Oudit
auditor in Belarusian (Tarashkevitsa): Аўдыт
auditor in Catalan: Auditoria
auditor in Czech: Audit
auditor in German: Audit
auditor in Spanish: Auditoría
auditor in French: Audit
auditor in Indonesian: Audit
auditor in Lithuanian: Auditas
auditor in Hungarian: Audit
auditor in Malayalam: ഓഡിറ്റിങ്
auditor in Dutch: Auditing
auditor in Japanese: 監査
auditor in Polish: Audyt
auditor in Portuguese: Auditoria
auditor in Romanian: Audit
auditor in Russian: Аудит
auditor in Finnish: Tilintarkastus
auditor in Swedish: Revision
auditor in Ukrainian: Аудит
auditor in Chinese: 審計
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