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As most commonly used in legal settings, an audit is an examination of financial records and documents and other evidence by a trained accountant. Audits are conducted of records of a business or governmental entity, with the aim of ensuring proper accounting practices, recommendations for improvements, and a balancing of the books. An audit performed by employees is called "internal audit," and one done by an independent (outside) accountant is an "independent audit." Auditors may refuse to sign the audit to guarantee its accuracy if only limited records are produced.
The following is an example of a state statute providing for an agency audit:
The approved and certified association receiving and disbursing funds as authorized in this article shall, within 60 days following the end of each calendar year, or within a period of 60 days following the close of its fiscal year, cause an audit of its books and accounts to be conducted by a certified public accountant, disclosing receipts, disbursements, expenditures and other information pertinent thereto, and a copy thereof shall be forwarded to the State Board of Agriculture and Industries for inspection and review. The Department of Examiners of Public Accounts of the State... shall be authorized to audit, review and otherwise investigate the receipts and disbursements of such funds in the same manner that such duties are performed for examination and audits of agencies and departments of the State ... An examination or audit required by this section to be made and submitted to the State Board of Agriculture and Industries shall be open to public inspection. Within 90 days following the close of a certified association's fiscal year, if it has received any funds from assessments levied and collected pursuant to this article, such association shall publish a duly verified statement in the publication of the certified association showing the amount so received and collected and the amount or amounts spent for each project and item."