What does "audit" mean?

Audit means a systematic, independent, and thorough examination of records, accounts, operations, or compliance to verify accuracy, honesty, and adherence to standards and laws. The term comes from Latin auditus meaning hearing, historically referring to officials listening to accounts being read. In accounting, an audit means reviewing financial statements, receipts, and transactions to ensure they are correct and follow accounting principles like GAAP and to detect errors or fraud. In tax context, an IRS audit means the Internal Revenue Service checks your tax return, income, deductions, and supporting documents to ensure you reported correctly and paid correct tax. In business, an internal audit examines processes, controls, and risk management to improve efficiency and prevent problems. In quality management, an audit checks whether products or processes meet ISO standards. Audits can be performed by internal auditors who work for the organization or external auditors who are independent. The purpose of any audit is to provide assurance, build trust for investors or regulators, identify weaknesses, and promote accountability, so an audit is essentially an official checkup to ensure everything is as it should be.