Primary navigation:

QFINANCE Quick Links
QFINANCE Topics
QFINANCE Reference

Home > QFINANCE Dictionary > Definition of external audit

Definition of

external audit

Accounting

periodic independent audit of firm's accounts a periodic examination of the books of account and records of an entity conducted by an independent third party (an auditor) to ensure that they have been properly maintained; are accurate and comply with established concepts, principles, and accounting standards; and give a true and fair view of the financial state of the entity.

Related definitions of "external audit"

Recommended Further Reading (Term count)
  • Avoiding Conflict of Interest in Internal Audits
    Every year a company undergoes an external audit and will also undertake a program of internal auditing. Using external auditors to carry out internal audit work can lead to a conflict of interest. A conflict of interest may also occur when an internal auditor has a personal or professional involvement or association with the area that is subject to the audit.There are two essential elements that apply to ensure that such conflicts of interest...
  • How Internal Auditing Can Help with a Company’s Fraud Issues
    by Gail Harden
    Regulatory oversight is increasing, as are penalties. A passive attitude in an organization toward oversight and the topic of fraud, antifraud programs, and controls would be a strong indicator of a significant deficiency in its system of internal controls.Economic factors can increase the occurrence of fraudulent practices. When the economy is in a downturn the risk of fraud increases due to personal financial pressures, the stagnation of...
  • Effective Financial Reporting and Auditing: Importance and Limitations
    by Andrew Higson
    The major problem with financial reporting is that people with limited financial knowledge can look at a set of accounts and, by attempting to interpret the numbers, feel that they understand what is happening in an organization. While in simpler times this may have been true, the scale and complexity of modern business, together with the limitations of what can be portrayed in financial statements, means that today’s statements may have the...
  • Best Practices in Risk-Based Internal Auditing
    by Sheryl Vacca
    In designing risk-based auditing and monitoring activities, it is important that the internal auditor works closely with the organization’s senior leadership and the board, or committee of the board, to gain a clear understanding of auditing and monitoring expectations and how these activities can be leveraged together to help minimize and mitigate risks for the organization. These discussions should also include leadership from the legal,...

Definitions of ’external audit’ and meaning of ’external audit’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’external audit’ and other financial terms with our online QFINANCE Financial Dictionary.

Back to top