Auditing is the process of independently examining a company's financial records, statements, and internal controls to verify they are accurate, complete, and compliant with accounting standards.
There are two main types: external audits (conducted by independent firms like Deloitte or PwC) and internal audits (done by the company's own audit team). Public companies are required to have annual external audits.
Auditors check for errors, fraud, and misstatements. When they are satisfied, they issue an audit opinion — an "unqualified" (clean) opinion means the financials are fairly presented.