Auditing is the process of checking financial records and other information to make sure everything is correct and meets legal and regulatory requirements. Audits can be done by people inside a company (internal auditors) or by outside professionals (external auditors).
Internal auditors work for a company and look at the company’s finances and operations. They try to find mistakes, ways to improve how the company works, and make sure the company is following laws and regulations.
External auditors are hired by a company to check its financial records and give an opinion on whether the records are accurate. They make sure that the company’s financial statements are reliable and can be trusted by people like investors.
There are different types of audits, like financial audits that focus on the company’s finances, operational audits that look at how the company operates, and compliance audits that check if the company is following the rules.
Audits can help companies find mistakes and make better decisions. Auditing is important because it helps make sure that financial information is correct and trustworthy, which is important for everyone who relies on that information.