accountingaudit

An accounting audit, often referred to simply as an audit of financial statements, is the systematic examination of an organization's accounting records, financial statements, and related disclosures by an independent auditor to determine whether they present fairly, in all material respects, the financial position and performance in accordance with the applicable financial reporting framework (such as GAAP or IFRS). The purpose is to provide assurance to stakeholders—investors, lenders, regulators, and others—that the statements are reliable and free from material misstatement.

The audit process typically includes planning and risk assessment, evaluation of internal controls, gathering evidence through substantive testing and analytical procedures, and forming an audit opinion. Auditors test transactions, verify supporting documents, assess accounting policies, and consider estimates and judgments. The result is an audit report that expresses an opinion: unqualified (clean), qualified, adverse, or disclaimer, depending on evidence and scope. Management may receive a separate management letter highlighting control weaknesses.

Auditing can be external (independent examination of public or large organizations' financial statements) or internal (performed by an organization's own auditors to improve governance and risk management). External audits are commonly required for publicly traded companies and regulated entities. The practice is guided by professional standards and is influenced by technology, including data analytics and continuous auditing. Limitations include the inherent possibility of material misstatements despite procedures and reliance on sampling and management representations.