Legal Definitions - desk audit

A desk audit is a review process conducted by an auditing body (such as a government agency, regulatory authority, or internal department) primarily by examining documents, records, and information that are submitted by the entity being audited. Unlike an on-site audit, a desk audit does not involve a physical visit to the audited entity's premises. The auditor performs the review from their own office, relying solely on the provided materials to assess compliance, accuracy, or eligibility.

• Example 1: Tax Compliance Review

  A small business owner receives a letter from the national tax authority requesting copies of specific invoices, bank statements, and expense receipts for a particular tax year. The letter instructs the owner to mail or upload these documents for review.

  This illustrates a desk audit because the tax authority is reviewing the business's financial records and supporting documents remotely from their office to verify the accuracy of the filed tax return, without sending an auditor to the business's physical location.

• Example 2: Grant Funding Verification

  A non-profit organization receives government funding for a community development program. As part of the grant agreement, they are required to submit quarterly financial reports, receipts for all expenditures, and program activity logs to the funding agency. The agency then reviews these submissions to ensure proper use of funds.

  Here, the funding agency performs a desk audit by examining the submitted documents from their office to ensure the non-profit is using the grant money appropriately and fulfilling the program's objectives as outlined in the agreement, without needing to visit the non-profit's facilities.

• Example 3: Professional Licensing Renewal

  A state board responsible for licensing medical professionals requires doctors to submit documentation of continuing education credits, proof of malpractice insurance, and a clean disciplinary record annually for license renewal. The board's staff reviews these submitted materials to approve or deny renewals.

  This is a desk audit because the licensing board evaluates the professionals' compliance with renewal requirements by reviewing the submitted reports and documents remotely, rather than conducting in-person interviews or inspections.