An audit is a systematic and independent examination of financial statements, records, operations, or performance of an organization to determine whether they present a true and fair view in accordance with established criteria, such as accounting standards or regulatory requirements. The primary objective of an audit is to provide assurance to stakeholders—such as investors, creditors, and regulators—that the financial information is accurate, complete, and free from material misstatement.

Audits can be classified into different types:

• Financial audits focus on verifying the accuracy of financial statements.

• Internal audits assess internal controls, risk management, and compliance within an organization.

• External audits are conducted by independent third parties and are often required by law for publicly traded companies.

• Operational or performance audits evaluate efficiency and effectiveness in operations.

The audit process typically involves planning, evidence collection, testing controls, and forming an opinion. Auditors use techniques such as document review, observation, inquiry, and analytical procedures to gather sufficient evidence.

Audits play a crucial role in promoting transparency, accountability, and confidence in financial reporting. They help detect errors, fraud, or inefficiencies and contribute to improved governance and decision-making across organizations.