In financial terminology, what does "auditable" refer to?

In financial terminology, "auditable" specifically refers to financial transactions that can be verified and reviewed. This means that the records associated with these transactions, such as invoices, receipts, and other documentation, are complete and organized in a way that allows for thorough examination by auditors or compliance officers. Auditable transactions must provide a clear paper trail that can be traced back to ensure accuracy, legality, and adherence to regulations or policies.

This characteristic is crucial for maintaining transparency and accountability in financial practices. It ensures that the financial information can be trusted and is accurate, which is vital for stakeholders, including regulatory bodies and investors. Moreover, being auditable helps an organization identify irregularities or discrepancies in financial reporting, thus ultimately reinforcing financial governance and control mechanisms.