An audit is a process of examining or inspecting various account books by an auditor. This is accompanied by a physical inventory check to ensure that all departments follow a defined method of documenting activities.
It is done to ensure the correctness of the organisation’s financial accounts. Internal audits can be performed by workers or heads of departments, while external audits can be performed by an outside business or external auditors. The idea is to check and verify the accounts by an independent authority to ensure that all books of accounts are done fairly and that no misrepresentation or fraud is being conducted.
All publicly listed firms have to get their accounts audited by an independent auditor before they declare their results for any quarter. The objective is for an impartial body to audit and validate the accounts to guarantee that the accounting records are done fairly and that no deception or fraud is going on. Before releasing their quarterly results, all publicly traded companies must have their accounts examined by an independent auditor.