Bank Audit

Introduction

An audit is an evaluation of an organization, system, process, project or product. It is performed by a competent, independent, objective, and unbiased person or persons, known as auditors. The purpose is to verify that the subject of the audit was completed or operates according to approved and accepted standards, statutes, regulations, or practices. It also evaluates controls to determine if conformance will continue, and recommends necessary changes in policies, procedures or controls. Auditing is a part of some quality control certifications such as ISO 9000.

An audit is an accounting procedure under which the financial records of a company or individual are closely inspected to make sure that they are accurate. Dishonest companies fear independent audits of their business practices which may reveal embezzlement and other misuses of funds. An audit keeps a company honest and also reassures employees and investors as to the financial status of the organization. There are two primary types of audit: internal audits and independent audits.

Regardless as to the type of audit, it should be assumed that an audit will be performed without bias. In the case of an internal audit, this can be difficult, because an internal audit is carried out by the accounting staff of the company concerned. Generally, an internal audit can only successfully be carried out by a large accounting department, because auditors cannot audit records to which they contributed. Internal audits are usually carried out on a regular basis by large companies to ensure that their finances are in order, and if the company is publicly traded, audit reports are available for inspection by stockholders.

An independent or external audit is carried out by a neutral third party, such as a professional accounting firm which specializes in audits. In both cases, all of the financial records of a company including ledgers, bank statements, payroll, tax information, internal financial reports,...