Legal Definitions - periodic audit

A periodic audit refers to a systematic and independent examination of an organization's financial records, operational processes, compliance with regulations, or other specific areas, conducted at regular, predetermined intervals. The primary purpose is to ensure accuracy, efficiency, adherence to established standards, and to identify potential issues or areas for improvement over time.

• Example 1: Financial Review for a Non-Profit

  A large charitable foundation, which receives significant public donations, engages an independent accounting firm to conduct an annual financial audit. This audit systematically reviews all incoming donations, outgoing grants, administrative expenses, and financial statements to ensure transparency, proper use of funds, and compliance with accounting principles and donor agreements. The regularity of this annual review makes it a periodic audit, providing consistent oversight of the foundation's financial health.

• Example 2: Quality Control in Manufacturing

  A company that manufactures medical devices performs a quarterly quality assurance audit of its production lines. During these audits, a team inspects raw material sourcing, assembly processes, sterilization procedures, and final product testing to ensure that every device meets strict regulatory standards and internal quality benchmarks. This consistent, scheduled examination helps maintain high product quality and compliance, illustrating a periodic audit focused on operational standards.

• Example 3: Information Security Compliance

  A government agency handling sensitive citizen data conducts a biannual information security audit. This involves a thorough review of their network infrastructure, data encryption protocols, employee access controls, and incident response plans to confirm adherence to federal data protection laws and cybersecurity best practices. The recurring nature of this security assessment every six months makes it a clear example of a periodic audit, ensuring ongoing data integrity and privacy.