What does it mean to be audited?

[denjoshep]

I want to understand what does it mean to be audited by the tax authorities. Does it involve penalties automatically or just a review of records?

 

[Oscar]

An audit is a formal review or examination that is typically of financial records, processes or systems in order to have accuracy, compliance and transparency. Audits are done to look into the errors, fraud or inefficiencies and are usually conducted by independent auditors or regulatory bodies. Audits may be performed on an individual, business or organization aiming at ensuring that all things are correct, within the law or norm and within guidelines required.

 

[Leo]

To be audited means your records, activities, or finances are officially reviewed and examined to ensure accuracy, compliance, and correctness.

 

[John Smith]

Being audited means your financial records, tax returns, or business processes are formally reviewed to verify accuracy and compliance. Audits are conducted by government authorities, internal teams, or independent firms to check for errors, fraud, or regulatory violations. The goal is transparency, accountability, and ensuring correct reporting practices.