Jurisdiction(s):
United Kingdom

Key definition

Audit definition

What does Audit mean? In asset-based lending, an audit is the lender’s on-site or desktop review of the borrower’s collateral, records and controls to verify the quality and value of funded assets and the accuracy of borrowing-base reporting. It is distinct from a statutory audit of financial statements under the Companies Acts. “Audit” in this context is a descriptive term used in facility documents (also called a collateral audit, field examination or survey), not one defined by legislation or case law. Audits typically occur pre‑lend and periodically during the facility, or on triggers (e.g. covenant breach, rapid growth or acquisition). Scope usually covers receivables...

Company auditors’ statutory duties, rights and offences under the UK Companies Act 2006: reporting, signature, information access and meetings

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Practice notes

This Practice Note sets out and explains the legal provisions in the Companies Act 2006 (CA 2006), together with other legislation, concerning an auditor’s responsibilities and rights. Additional requirements may govern a company’s audit obligations for a listed company, an AIM company, or a company whose securities are admitted to the AQSE Main Market, AQSE Growth Market or AQSE Trading (previously NEX Exchange Main Board, NEX Exchange Growth Market and NEX Exchange Secondary Market); however, those matters fall beyond the scope of this Practice Note and are not addressed here.

An auditor’s duties

Duties in relation to preparation of an auditor's report

A company’s appointed auditor is engaged to report (the auditor’s report) formally on the company’s annual accounts. That report on the annual accounts must also address information presented in the company’s directors’ report, any strategic report prepared, the auditable portion of the directors’ remuneration report (where relevant and applicable), and any separate corporate governance statement provided. For more on when an auditor’s report is required, and the auditor’s responsibilities regarding its scope and content, see Practice Note: When to audit company accounts and the content of the auditor’s report...

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Web page updated on 21/05/2026

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