AUDIT
audit,n. A formal examination of an individual’s or organization’s accounting records,
financial situation, or compliance with some other set of standards. See GENERALLY
ACCEPTED AUDITING STANDARDS. — audit,vb. — auditor,n.
audit of return.See tax audit.
compliance audit.An audit conducted by a regulatory agency, an organization, or a third party
to assess com-pliance with one or more sets of laws and regulations.
correspondence audit.An IRS audit of a taxpayer’s return conducted by mail or telephone.
[Cases: Internal Revenue 4443. C.J.S. Internal Revenue §§ 616, 618.]
desk audit.A review of a civil-service position to determine whether its duties and
responsibilities fit the prescribed job classification and pay scale. [Cases: Officers and Public
Employees 11.8. C.J.S. Officers and Public Employees §§ 74, 77.]
double audit.An audit of the same subject performed separately by two independent auditors.
environmental audit.A company’s voluntary self-audit to evaluate its
environmental-management programs and to determine whether it is in compliance with
environmental regulations.
event-driven audit.An audit that focuses on particular transactions or activities that may raise
significant legal issues. • Unlike routine periodic audits, an event-driven audit can focus
substantial auditing resources on analyzing a particular event.
field audit.An IRS audit conducted at the taxpayer’s business premises or lawyer’s offices.
[Cases: Internal Revenue 4443. C.J.S. Internal Revenue §§ 616, 618.]
independent audit.An audit conducted by an outside person or firm not connected with the
person or organization being audited.
internal audit.An audit performed by an organization’s personnel to ensure that internal
procedures, operations, and accounting practices are in proper order.
office audit.An IRS audit of a taxpayer’s return conducted in the IRS agent’s office. [Cases:
Internal Revenue 4443. C.J.S. Internal Revenue §§ 616, 618.]
periodic audit.An audit conducted at regular intervals to assess a company’s current
condition.
post audit.An audit of funds spent on a completed capital project, the purpose being to assess
the efficiency with which the funds were spent and to compare expected cash-flow estimates with
actual cash flows.
tax audit.The review of a taxpayer’s return by the IRS, including an examination of the
taxpayer’s books, vouchers, and records supporting the return. — Also termed audit of return.
[Cases: Internal Revenue 4443. C.J.S. Internal Revenue §§ 616, 618.]
transactional audit.An audit performed for due-diligence purposes to determine whether there
are potentially significant problems with a transaction. • Transactional audits are often conducted
in real-property transactions to identify any environmental problems. In that context, the audit is
sometimes called a site assessment.[Blacks Law 8th]