Short answers, pulled from the story.
An academic audit is a course taken for learning only, with no grade awarded and no assessment of the student's performance. Some institutions note the word "audit" on a transcript to show the student elected this option. The term comes from the Latin word meaning "he or she hears," reflecting that the student receives teaching without being evaluated.
The word "audit" is Latin and translates as "he or she hears." In the academic sense, this root captures the core meaning: the audit student has heard and experienced a course but has not been assessed on the material.
Students audit courses for reasons including personal enjoyment, self-enrichment, and academic exploration without needing credit. Others use auditing to avoid the risk of a poor grade, particularly when reviewing a long-unstudied subject or when first exploring a field where they have little experience or confidence.
Auditing is generally an option at institutions of higher learning, such as colleges and universities. It is not typically available at the grammar school or secondary school level.
It depends on the institution. Some schools record a grade of "audit" for students who have elected not to receive a letter grade, indicating that the individual received teaching but was not evaluated for achievement of a knowledge standard.
Taking a course for a grade involves assessment of the student's performance and results in a letter grade that reflects their demonstrated knowledge. Auditing involves receiving the same teaching but without any evaluation or graded outcome. The audit record indicates experience of the course, not mastery of its subject.