What is an Audit?
An audit is an independent examination of financial records, processes, or controls to form an opinion on their accuracy and compliance. The word covers very different exercises depending on who performs it and why, but the constant is independence: the person forming the opinion is not the person who produced what is being examined.
The main types of audit
External audit is conducted by an independent firm to give shareholders an opinion on whether the financial statements present a true and fair view. It is mandatory for listed and most large companies. Internal audit reports to the audit committee and evaluates risk management, controls, and governance across the organization, with a scope set internally.
Beyond these two sit specialised engagements: compliance audits testing adherence to a specific regulation, operational audits examining efficiency rather than accuracy, IT audits covering systems and access, and forensic audits triggered by a suspicion of fraud.
How an audit engagement runs
The sequence is broadly stable: planning and risk assessment, understanding and walking through the relevant processes, testing controls, substantive testing of balances and transactions, then reporting. Findings are rated, management responds with an action plan, and follow-up verifies remediation.
The pressure point is testing. Traditional substantive work relies on samples, which sets a ceiling on what any audit can find. Data-driven auditing shifts that boundary by examining complete populations, which changes both the coverage and where the auditor spends their time.
Audit and Supervizor
Supervizor's audit analytics solution gives audit teams full-population testing out of the box, without building queries from scratch. Teams use it to:
- Replace sampling with complete coverage across journal entries, payments, purchasing, and expenses
- Focus fieldwork on real exceptions, since the anomalies are identified before the team arrives on site
- Shorten the audit cycle by automating the repetitive testing that dominates most engagements