Audit

"[1] In a narrower sense, an audit refers specifically to the verification of financial statements, primarily assessing their authenticity, legality, and fairness.

Its purpose extends beyond verifying financial data to ensuring the efficiency, compliance, and risk management of a business's overall operations.

By offering this assurance, audits help stakeholders evaluate and enhance the effectiveness of risk management, internal controls, and governance over the subject matter.

[6] During medieval times, when manual bookkeeping was prevalent, auditors in Britain used to hear the accounts read out for them and checked that the organization's personnel were not negligent or fraudulent.

[9] The Central Auditing Commission of the Communist Party of the Soviet Union (Russian: Центральная ревизионная комиссия КПСС) operated from 1921 to 1990.

The evaluation of obtained evidence determines if the information systems are safeguarding assets, maintaining data integrity, and operating effectively to achieve the organization's goals or objectives.

Financial audits also assess whether a business or corporation adheres to legal duties as well as other applicable statutory customs and regulations.

[10][11] Financial audits are performed to ascertain the validity and reliability of information, as well as to provide an assessment of a system's internal control.

A statutory audit is a legally required review of the accuracy of a company's or government's financial statements and records.

Due to constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error.

"[citation needed] In most nations, an audit must adhere to generally accepted standards established by governing bodies.

Although the process of producing an assessment may involve an audit by an independent professional, its purpose is to provide a measurement rather than to express an opinion about the fairness of statements or quality of performance.

Quality audits are also necessary to provide evidence concerning reduction and elimination of problem areas, and they are a hands-on management tool for achieving continual improvement in an organization.

To benefit the organization, quality auditing should not only report non-conformance and corrective actions but also highlight areas of good practice and provide evidence of conformance.

In this audit, the auditor thoroughly examines the efficiency, effectiveness and economy of the operations with which the management of the entity (client) is achieving its objective.