What is an audit?

An audit is fundamentally characterized as an independent examination of financial information, which is conducted to ensure its accuracy and to verify compliance with accounting standards. This process involves a systematic review of a company's financial statements and related disclosures, assessing whether they present a true and fair view of the organization's financial position. Auditors evaluate the adequacy of internal controls and the processes adopted for financial reporting to identify any material misstatements or risks.

The audit process adds credibility to the financial information provided by the organization, which is crucial for stakeholders such as investors, creditors, and regulatory agencies who rely on the integrity of these reports for decision-making. The independence of the auditors is key since it ensures objective evaluation without any conflicts of interest, thereby enhancing the reliability of the audit findings.