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Simple English definitions for legal terms
periodic audit
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A quick definition of periodic audit:
A periodic audit is a regular examination of an individual or organization's financial records, compliance with regulations, and overall current condition. It is conducted at set intervals to ensure that everything is in proper order. This type of audit helps to identify any potential issues and allows for corrective action to be taken before they become major problems. It is like a check-up for a company or person's financial health.
A more thorough explanation:
A periodic audit is a type of examination that is conducted at regular intervals to assess the current condition of a company. It is a formal process that involves reviewing an individual's or organization's accounting records, financial situation, or compliance with a set of standards.
For example, a company may conduct a periodic audit of its environmental-management programs to ensure that it is complying with environmental regulations. Another example is an internal audit performed by an organization's personnel to ensure that internal procedures, operations, and accounting practices are in proper order.
Periodic audits are important because they help companies identify areas where they need to improve and ensure that they are complying with relevant laws and regulations. By conducting regular audits, companies can also prevent fraud and other financial irregularities.