Auditing is a systematic examination of an organization's financial records, accounts, transactions, and systems to verify their accuracy and compliance with laws and regulations. The primary purpose of auditing is to provide assurance to stakeholders, such as investors, creditors, and regulators, that the financial statements are free from material misstatements and fraud. Auditors typically follow a structured process that includes planning, conducting fieldwork, evaluating findings, and issuing a report. They may also provide recommendations for improvements in internal controls and accounting practices. Auditing can be performed by internal auditors within the organization or by external auditors who are independent third parties. External auditors must be licensed and follow specific standards and guidelines set by regulatory bodies, such as the American Institute of Certified Public Accountants (AICPA) and the Public Company Accounting Oversight Board (PCAOB). Overall, auditing plays a crucial role in ensuring accountability, transparency, and trust in financial reporting, which are essential for maintaining investor confidence and the integrity of financial markets.