Legal Definitions - field audit

A field audit is a type of examination or inspection conducted by auditors directly at the physical location of the entity being audited. Instead of reviewing documents submitted remotely, auditors travel to the business premises, government office, or other relevant site to personally inspect records, observe operations, interview personnel, and verify assets. This on-site presence allows for a more comprehensive and direct assessment of compliance, financial accuracy, or operational effectiveness.

• Example 1: Tax Compliance

  The state's Department of Revenue decides to conduct a field audit of a local restaurant. Instead of asking the restaurant to mail in its financial records, tax auditors visit the restaurant's premises. While there, they physically review sales receipts, payroll records, bank statements, and inventory logs. They might also observe daily operations to verify reported income and expenses. This direct, on-site examination of the restaurant's financial and operational records at its business location makes it a field audit.

• Example 2: Regulatory Oversight

  A federal agency responsible for workplace safety conducts a field audit of a construction company operating a large building project. Agency inspectors visit the active construction site. They physically inspect safety equipment, review worker training logs on-site, observe construction practices, and interview foremen and workers to ensure compliance with safety regulations. This hands-on, on-location inspection of the company's operations and adherence to rules is a clear instance of a field audit.

• Example 3: Internal Controls

  A national bank's internal audit department performs a field audit of one of its smaller branch offices located in a different city. A team of internal auditors travels to that specific branch. They physically count cash in the vaults and at teller stations, verify customer account documentation, review loan application files, and observe transaction processing procedures. Their presence at the branch to directly assess its financial controls and operational integrity constitutes a field audit.