Auditing

Auditing is an accounting function that involves the review and evaluation of financial records of a company. It is done by auditors. These reviews are called audits.

Outside/external audits are a normal and regular part of business practice. In addition, many corporations maintain a continuous internal audit by their own accounting departments. They review operating procedures and financial records and report to management on the current state of the company’s fiscal affairs. The internal auditors make suggestions to management for improvements in the standard operating procedures and check the accounting records.

Independent auditing is done by accountants who are not employees of the organization whose books they examine. The independent accountant is almost always a CPA. Independent accountants review the business’s operating activities; they examine financial statements and the accounting records. An audit can take several days, even for a fairly small company.

Management must act upon the information in the financial records; the auditor ensures that this information is accurate, adequate, and accessible.

Exercises in Word Study

Ex.1. Form nouns from the following verbs:

evaluate, improve, examine, act, inform, organize, manage.