Key Difference: Audit is the inspection, examination or verification of a person, organization, system, process, enterprise, project or product. Inspection is the act of examining something, often closely.

Audit is an independent review and examination of records and activities to assess the adequacy of system controls, to ensure compliance with established policies and operational procedures, and to recommend necessary changes in controls, policies, or procedures. It is used to determine the authenticity and validity or to ensure that a process is being followed. Also, an audit is mainly used in accounting to ensure the validity and reliability of information in the statements and that the information is free from material error. An audit can be done anytime.

 Inspection indicates that the regulatory authorities are checking documents, records, facilities and any other resources to verify a certain set of standards. It is the act of examining something, often closely. Inspection is one of the important tools for controlling the affairs of bank and also judging the efficiency of management. It is a multi purpose function, and includes all the elements of audit. It basically helps in overall improvement in the working and efficiency of the branch.

Comparison between Audit and Inspection:

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