What is an audit?

An audit is fundamentally defined as an independent examination of financial information. This process is conducted to assess the accuracy and fairness of financial statements, ensuring they comply with applicable accounting standards and regulations. Auditors, who may be external or internal to the organization, review financial records, transactions, and controls to provide stakeholders with a level of assurance regarding the integrity of the financial reporting.

The role of audits extends beyond mere verification; they also enhance accountability and transparency within an organization. By conducting an audit, stakeholders such as investors, creditors, and regulators can gain confidence in the reported financial position and performance of the entity. This is vital for making informed decisions based on the financial health of the organization.

In contrast, the other options reflect different concepts that do not align with the definition of an audit. An internal review of employee performance focuses on human resources and operational effectiveness. A process of budget revision pertains to financial planning and adjustments, not an external examination. A survey of customer satisfaction is related to market research and feedback on products or services, which is entirely separate from the financial auditing process.