Which type of audit takes place in real-time?

A concurrent audit is conducted in real-time while the processes or transactions are occurring. This type of audit allows auditors to evaluate practices and compliance as activities take place, which enhances the ability to identify issues immediately and implement corrections or adjustments without delay. By reviewing processes concurrently, it helps ensure that compliance measures are being adhered to at the moment, thereby minimizing risks and improving overall quality and efficiency in operations.

In contrast, a retrospective audit examines past transactions and events after they have already occurred, focusing on assessing their compliance and effectiveness. An annual compliance review typically involves a comprehensive assessment of compliance over the entire year, which takes place periodically and not in real-time. A preliminary audit usually serves as an initial assessment to prepare for more comprehensive evaluations but does not occur during the active performance of tasks or processes. Thus, the concurrent audit stands out as the only one that is truly executed in real-time, making it the correct answer.