What does a lease audit primarily examine?

A lease audit primarily examines compliance and accuracy in lease agreements. This process involves reviewing lease documents to ensure that the terms and conditions are being adhered to by both the lessor and the lessee. It checks for discrepancies in payment terms, lease duration, renewal options, and any clauses that may affect financial obligations. The objective is to confirm that all terms are being followed correctly and to identify any potential areas of financial oversight or mismanagement.

Focusing on compliance and accuracy helps parties involved in the lease agreement protect their interests and maintain good financial health. It may also include validating amounts that have been paid against what was agreed upon in the contract, ensuring that no overcharges or underpayments are occurring.

While the other options pertain to relevant aspects of leasing, they do not capture the primary focus of a lease audit. The market competitiveness of lease terms evaluates how a lease stacks up against others in the market but does not directly relate to compliance and accuracy. Financial ratios of the lessor could provide insights into their overall financial health but are not the core focus of a lease audit. Lastly, assessing the lessee's operational performance is important for business operations but is separate from the purpose of examining lease agreements for compliance and accuracy.