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]