Audit refers to an independent economic supervision activity in which specialized agencies conduct pre-and post-inspection on major projects and financial revenues and expenditures of governments, financial institutions, enterprises and institutions at all levels according to law. As a supervision mechanism, audit has a long history of practical activities.
Audit is a full-time organization and personnel authorized or entrusted by the state, and uses special methods according to national laws and regulations, auditing standards and accounting theories.
It is an independent economic supervision activity to check and supervise the authenticity, correctness, compliance, legality and efficiency of the audited entity's finance, financial revenue and expenditure, business management activities and related materials, evaluate economic responsibility and verify economic business, so as to safeguard financial law and discipline, improve business management and improve economic efficiency.
As a supervision mechanism, audit has a long history in practice, but people have different opinions on the definition of audit. The American Accounting Association is recognized as representative and widely cited.
1972, the definition of audit is given in the announcement of basic concepts of audit, that is, "audit refers to a systematic process of objectively collecting and evaluating evidence and transmitting the results to interested users to find out the consistency between the identification of relevant economic activities and economic phenomena and established standards".
Evidence is various forms of evidence used by auditors to determine the legal compliance or effectiveness of economic activities of audited units and the truth and fairness of economic phenomena. Collecting sufficient and powerful audit evidence is the core of audit work. In a sense, audit is a purposeful and planned process of collecting, identifying, synthesizing and utilizing audit evidence.