An energy audit is a systematic approach used to quantify energy usage and identify opportunities to improve energy efficiency. It involves verifying and analyzing energy use to provide recommendations and an action plan for reducing consumption. The top three operating expenses for most industries are energy, labor, and materials, so energy management is important for cost reduction. An energy audit helps understand how energy is used, identify waste areas, and scope for improvement. It provides a benchmark for managing energy and planning more effective use. Preliminary audits are quick and identify easy savings areas, while detailed audits evaluate all major systems accurately to determine precise savings calculations and project costs.