While physicians acknowledge the importance of the medical record to both patient care and medical education, there is increasing awareness that the record along with our current system of processing medical information is seriously deficient. This paper attempts to document the type and extent of deficiencies in our current system of handling medical data. The extent of these deficiencies has serious implications for the usefulness of current practices of medical record audit. Audit of the record to determine clerical deficiencies is relatively simple and as discussed in this paper can be useful. The audit may also be useful in discovering gross and easily discernible medical errors where the standards are relatively simple and well defined. However, deficiencies in current methods of handling medical data associated with a lack of standards for either the organization of the medical record or the logic and criteria that should govern the collection and use of medical data seriously impair the effectiveness of the audit as a tool for assessing the quality of care. There is a critical need to develop a standardized and systematic approach to record keeping and to begin to define the logic and medical criteria that should govern the collection and use of medical data.