ACCOUNTING GLOSSARY
Audit
Financial Statement Audit
An independent examination designed to provide an opinion on financial statements.
What does Audit mean?
An independent examination designed to provide an opinion on financial statements. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Audit in context
A larger credit facility may require annual audited statements.
Why it matters in financing
Audit can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related accounting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.