Dictionary of Accounting Terms: preliminary audit
preliminary audit
- fieldwork done prior to the end of the accounting period under examination in order to quicken the issuance of the audit report. The preliminary audit includes evaluating internal controls, financial records, and transactions. An analysis of account balances is begun. The CPA determines what audit scope and steps will be required so that an opinion on the financial statements may be rendered. The preliminary audit is different from a periodic audit because it typically involves no audit report and is an element of a regular annual audit.
- first engagement with a client, examining the overall business and its accounting system and operations before deciding on the extent of audit procedures that will be necessary.
