Essential auditing terms

Essential auditing terms

Auditing definition

What is audit and what is the purpose of auditing?

Auditing is a related but separate discipline to accountancy. It is another word for audit, which is an official examination of the accounts of a business. There are two types of audit; namely internal audit and external audit.

Most common audit words with definitions

• Auditor:

A person who examines a company’s financial records.

• Auditee

The company being audited.

• Audit client

The company or the person that requests an audit.

• Auditor’s report

A brief report which indicates that the financial statements have been audited. It also gives the auditor’s opinion about the financial statements.

There are two types of audit, namely external and internal audit.

• External audit

A process whereby an external auditor is appointed from outside the business (organization) so as to examine its financial records (financial statements) in order to show that the records are true and correct.

• Internal audit

The process of examining a company’s accounting records and financial statements usually by an auditor who is employed by the same company.

The internal audit report provides information for the management of the company.

The most common English words, expressions, and collocations for banking and finance.

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