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Audit

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An audit is an objective process that involves evaluating and examining a company's financial information. Journals, bank and credit union accounts, ledgers, invoices, expense accounts, and related documents are often scrutinized during the audit process. An audit may be conducted by either internal professionals (e.g. in the case of an internal audit) or external firms (i.e. in the case of an internal or an external audit). In both situations, audits are performed under the guidelines of Generally Accepted Accounting Principles (GAAP). An organization may undergo an audit for a number of different reasons. For instance, if an organization wants to obtain a loan, investment money or sell a business, the business may decide to undergo an audit to confirm and certify the accuracy of its financial documents.

Another common form of audit is an IRS audit where the IRS examines taxpayers (e.g. company or individual) financial data to ensure that all government reported tax filings are accurate. Depending on the situation, these IRS audits can be conducted in-person (i.e. office or field audit) or via mail (i.e. correspondence audit). An in-person audit is often more serious than a correspondence audit. Typically, the in-person audit will take place at an IRS office location or at the taxpayer's office location where records are kept. Although a taxpayer may request that the audit location be transferred to a location of their choice, the IRS is not required to grant such request.



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