The report found children missed £22m worth of education during the 2011-12 year.
On average, the absence equated to every primary school child missing nine days a year and each secondary school-aged child missing 13 days a year.
The report also found that those children living in higher poverty areas, in state care or from Traveller families were more likely to skip lessons.
However, despite the high levels of absent children, fewer than 4,000 pupils were referred to the Education Welfare Service for their non-attendance with 80% or 16,000, not referred to the specialist support service.
The auditors said the level of absence was "disturbing".
Given that 16,000 cases of persistent absence were not referred to the Education Welfare Service in 2011-12, there is a risk that disengaged pupils could be failed by the system.
NI Audit Office report
Auditor Kieran Donnelly said: "Regular school attendance and educational attainment are inextricably linked.
"It is therefore disturbing that around 20,000 pupils missed more than 15% of their lessons in 2011-12.
"This equates to six weeks of schooling."
The auditors found that absent children were more likely to fail exams and seven times less likely to be in education, employment or training by the age of 16 than those who regularly attended lessons.
Since the last audit office report in 2004, there has been progress made on the issue, this latest investigation found.
However, the level of unauthorised absence has increased, accounting for a third of all absences.
The public spending watchdog added: "Although pupil attendance has improved since 2007-8, levels of unauthorised absence remain a challenge and a number of disparities in attendance rates persist across several groups of pupils.
"It is vital that all our children attend school regularly and make the most of the opportunities that the education system offers to them.
"This will not only improve the life chances of our young people but will also ensure that our economy is well-equipped to compete in an increasingly global marketplace."
The audit office report made 14 recommendations on how to improve attendance levels which included tougher monitoring of absence, referring children to support and the education and library boards working better with the Department of Education.
I'm saddened to think we are behind England, but then they have more measures in place to actually help attendance.
Kathleen Gormley, school principal
Kathleen Gormley, principal at Hazelwood Integrated College on the outskirts of north Belfast said there needed to be more educational welfare officers to provide support.
She said: "I'm not surprised with what the report has come out with.
"I think we are good at keeping very accurate records. In most school attendance is taken hourly, so our percentages probably reflect that.
She continued: "At Hazelwood, or any other school, there is a long list for an support officer - who usually covers maybe one or two schools - to go out.
"So I don't think we have the same resources and also I think we don't publicise the importance of going to school.
"Schools do their bit, but there needs to be a constant message put out there that if you miss days at school, you miss valuable education."
Mrs Gormley said there needed to be more encouragement and incentives for children to attend school.
She added: "In certain locations there is not the culture or value of education or schools.
"In subjects like maths, there is a real disadvantage to children missing lessons and it has been shown that no matter what you do it can be very difficult for pupils to catch up.
"There is a reason for any child not attending school and we need to look at the reasons behind that.
"A child can be off for long periods for the likes of a death, but also they can be off because there is a concert in town or their families are taking them away on holidays and those are the kind of absences we need to be more stringent on."