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Simple English definitions for legal terms
transactional audit
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A quick definition of transactional audit:
A transactional audit is a type of audit that is conducted to ensure that a transaction is free from any potential problems. This type of audit is often performed in real estate transactions to identify any environmental issues that may exist. It is a due-diligence process that helps to determine whether a transaction is safe and secure. The audit is conducted by an independent auditor who is not connected to the transaction. The purpose of the audit is to identify any potential problems that may exist and to ensure that the transaction is completed in a safe and secure manner.
A more thorough explanation:
A transactional audit is a type of audit that is performed to ensure that a transaction is free from any potential problems. This type of audit is usually conducted for due-diligence purposes to identify any issues that may arise from a transaction. For example, in real estate transactions, a transactional audit may be conducted to identify any environmental problems that may exist on the property.
Other types of audits include:
- Compliance audit: An audit conducted to assess compliance with laws and regulations.
- Environmental audit: A voluntary self-audit conducted by a company to evaluate its environmental-management programs and compliance with environmental regulations.
- Internal audit: An audit performed by an organization's personnel to ensure that internal procedures, operations, and accounting practices are in proper order.
- Tax audit: A review of a taxpayer's return by the IRS to examine the taxpayer's books, vouchers, and records supporting the return.
These audits are conducted for different purposes and focus on different aspects of an individual's or organization's financial situation or compliance with laws and regulations.