Definition: An audit is the examination of an entity's accounting records, as well as the physical inspection of its assets. If performed by a certified public accountant (CPA), the CPA can express an opinion on the fairness of the entity's financial statements. This opinion is then issued along with the financial statements to the investment community.
An internal audit can address a broad array of issues, such as employee compliance with corporate polices. A compliance audit usually addresses an entity's compliance with the a government agency's rules and regulations.