What Is Auditing?

Introduction to Auditing

Auditing is a systematic process of objectively obtaining and evaluating evidence about financial information to determine whether it is presented fairly according to an established financial reporting framework. The primary goal of an audit is to enhance the credibility and reliability of financial statements for investors, lenders, regulators, and other stakeholders.

In the CPA profession, auditors follow Generally Accepted Auditing Standards (GAAS) and other professional standards established by the American Institute of Certified Public Accountants (AICPA) and, when applicable, the Public Company Accounting Oversight Board (PCAOB).

• Audits provide reasonable—not absolute—assurance.
• Auditors gather sufficient appropriate evidence before forming an opinion.
• Independent auditors must remain objective throughout the engagement.
• Financial statement users rely on audit reports to make informed decisions.