Definition

Noun: An audit that is restricted in its scope. This restriction can be in terms of the time period examined, the specific financial accounts or transactions reviewed, or the depth of the procedures performed. It is not a full, comprehensive examination of all financial statements.

Usage

A "limited audit" is conducted to provide assurance on specific areas of concern rather than on the financial statements as a whole. It is often requested by management, lenders, or investors who need verification of particular accounts or for a specific purpose.

Examples

• The bank requested a limited audit of the company's cash accounts before approving the loan.
• Due to budget constraints, the board agreed to a limited audit focusing only on procurement expenses this quarter.
• The limited audit revealed discrepancies in the inventory records, prompting a full-scale investigation.

Advanced Usage

• "To perform/conduct a limited audit": This is the standard phrasing for carrying out this type of examination.
  • The external auditors were engaged to perform a limited audit of the subsidiary's revenue recognition practices.
• "Scope of a limited audit": Refers to the specific boundaries and objectives of the audit engagement.
  • The engagement letter clearly defined the scope of the limited audit.

Variants and Related Words

• Agreed-upon procedures engagement: A specific type of limited engagement where an auditor performs procedures that are agreed upon with the client and reports factual findings.
• Review (accounting): A service providing less assurance than an audit but more than a compilation; it is a form of limited examination.
• Special audit: An audit with a narrow, specific focus, often investigative in nature; similar in concept to a limited audit.

Synonyms

• Restricted audit
• Partial audit
• Specific audit

Antonyms

• Full audit
• Comprehensive audit
• Complete audit

Related Phrases

• "Audit of limited scope": A formal, alternative description for a limited audit.
  • They commissioned an audit of limited scope to verify the year-end cash balance.
• "Limited assurance engagement": A broader category of services that includes reviews and agreed-upon procedures, where the level of assurance provided is moderate or limited, as opposed to the high assurance of an audit.

Noun

1. an audit of limited scope (limited in time span or confined to particular accounts etc.)