An audit generally signifies an objective review and assessment of a company's financial statements, which an external third party usually conducts to ensure accuracy and adherence to a specified budget.
There are mainly three types of Audits:
Internal audits are conducted by a company's employees and are confidential, intended solely for the eyes of the organization's internal staff. These audits are crafted for the benefit of management and internal stakeholders, providing them with valuable insights. Additionally, management can leverage internal audits to identify and address any weaknesses or inefficiencies within the corporation proactively, prior to the involvement of external auditors in reviewing the financial statements.
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