Definition

Noun: A formal, systematic examination and verification of a company's or organization's financial records and statements by an independent party. The purpose is to attest to the accuracy and fairness of the financial information presented, ensuring it complies with established accounting standards and principles.

Usage

A "financial audit" is a specific type of audit. It is a countable noun. It is conducted to provide assurance to stakeholders (like investors, regulators, and the public) that the financial statements are reliable. - The noun "audit" alone can sometimes be used interchangeably when the financial context is clear. - It is typically performed by external certified public accountants (CPAs) or audit firms.

Examples

• The board of directors requested an annual financial audit.
• After the financial audit, the company received an unqualified (clean) opinion from the auditors.
• The new regulations require all publicly traded companies to undergo a rigorous financial audit.

Advanced Usage

• To undergo a financial audit: The process of having one's financial statements audited.
  • The nonprofit must undergo a financial audit to maintain its grant funding.
• Audit opinion: The formal statement issued by auditors at the conclusion of a financial audit.
  • The auditor's report contained a qualified audit opinion due to an inventory discrepancy.

Variants and Related Words

• Audit (n): The general act of examining accounts. In a business context, it often implies a financial audit.
  • The internal audit department reviews procedures quarterly.
• Auditor (n): The person or firm that conducts an audit.
  • The auditor spent two weeks reviewing the ledger.
• Audited (adj): Describes financial statements that have been subject to an audit.
  • Please submit the audited financial reports.

Synonyms

• Examination of accounts: A more general phrase for reviewing financial records.
• Financial inspection: Emphasizes the scrutinizing aspect of the process.
• Attestation engagement: A formal accounting term for an audit that results in an attestation.

Related Phrases

• Internal audit: An audit conducted by the organization's own staff to evaluate internal controls, often distinct from a financial audit which is typically external.
• Tax audit: An examination of tax returns by a government authority, which is different in purpose from a financial audit.

Noun

1. an attestation that the client's financial statement is accurate