What is auditing

 

 

Auditing is the examination and systematic, structural evaluation of a business organization, the operations therein and the products and processes of production within the business system. Auditing also involves an examination and, therefore, an investigation into the past history, records and data about a company in order to gauge and discover the legality of the business’s operations, transactions, tax reporting and the overall handling of finances within the business.

Auditing is usually done by an objective, experienced individual who has nothing to lose or gain from the outcome of the audit and thereby can give a detailed, honest and impartial account of a business’s dealings and operating processes. Usually, these individuals are referred to as auditors.

Thus, Auditing is the process by which a business is investigated and evaluated to see if the business has operating by the approved accepted standards of regulatory procedures set forth for the business and if the business’s finances are all correctly reported and thereby utilized.