The term "Audit" usually refers to a financial statement audit. A financial statement audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent. The audit can be conducted internally by employees of the organization or externally by an outside Certified Public Accountant (CPA) firm.A Certified Public Accountant (CPA) firm may be hired for other reasons as well, such as consulting on tax planning or providing assurance services related to information technology or internal controls. Regardless of why a CPA is hired, it is important that the auditor have sufficient understanding of both accounting and auditing standards in order to conduct a proper review.One common misconception about audits is that they are only necessary for businesses with something to hide. In reality, all businesses should have their finances audited on at least an annual basis in order to ensure accuracy and protect themselves from potential fraud or embezzlement schemes perpetrated by employees.
