A Tax Audit is an examination of a taxpayer’s financial records to ensure that income, deductions, and tax payments are correctly reported as per tax laws.
A Tax Audit is conducted to verify whether a person or business has properly maintained accounts and complied with tax regulations.
In India, tax audits are governed by the Income Tax Department India under the Income Tax Act and are performed by Chartered Accountants registered with the Institute of Chartered Accountants of India.
"A business with turnover above the prescribed limit must get its accounts audited by a Chartered Accountant before filing income tax returns."