I work for a large privately owned company that is generous with its paid time off, or PTO. At the end of each year the company gives the option of either rolling over your balance into the next year or taking it as a payout of up to 40 hours of PTO.

This year one of the accountants at the main office decided to do an audit and found several employees had either more or less time accrued than thought.
PTO was mainly being tracked through three different systems, a website the employees used to request time off, their supervisor, and payroll. The company's stance is that payroll is correct, but some people are well over 40 hours in the negative. I always kept pretty good track of my time off and I find it hard to believe there is such a huge difference in my tracking and theirs

Many people have planned vacations around the holidays and now are being told they will not be paid for those days.

The main problem is, when the employees are asking to see the audit, or have their PTO audited to verify the claim, the company is refusing. Is this legal? I forgot to mention, the discrepancies supposedly go back more than 5 years. Thanks.

I have never heard your specific issue addressed formally in law. It might be covered by the following.

http://www.dir.ca.gov/dlse/FAQ_RightToInspectPersonnelFiles.htm

In CA you do have a right to see payroll records, but I don't know that PTO accrual is included in that. This link talks more about what information should be available:
http://www.dir.ca.gov/dlse/FAQ_RightToInspectPersonnelFiles.html

I recommend you contact the DLSE.

kitty!: This year one of the accountants at the main office decided to do an audit and found several employees had either more or less time accrued than thought... I always kept pretty good track of my time off and I find it hard to believe there is such a huge difference in my tracking and the company's... The main problem is, when the employees are asking to see the audit, or have their PTO audited to verify the claim, the company is refusing.

I find it almost inconceivable that a company would be unwilling to sit down and help you reconcile your computation of available PTO hours with its calculations - especially if (a) this is a small company, (b) the company just conducted an audit of its accrual computations, and (c) as a result of its audit subjected you and other employees to a significant, downward adjustment in your accrued, PTO hours.

My inconceivable thoughts on the matter notwithstanding, you should consider filing a wage claim with the DLSE http://www.dir.ca.gov/dlse/HowToFileWageClaim.htm if your company refuses to pay you for the "vacation time you take around the holidays." I can all but guarantee that your company will be sharing its calculations with the government (and you) then.