required to file?

For many years I lived in WA state until 7/2001, and then moved back to the NJ and registered my car in there in 7/2001. I later moved from NJ to PA in 2/2002.

My employer never updated my address to reflect my NJ residence. My official address simply went from WA to PA. This change took place 3/2002.

I have a few mutual funds which had my official address as NJ at the end of 2001.

My questions:
1) Do I legally need to file in NJ?
2) If yes to 1, if I do not file would I likely be audited given the fact that employer never reflected my NJ address?

Thank you for your help.

If you moved to NJ for other than a temporary or transient purpose, then you were a NJ resident and you are required to file a NJ return (registration of your car is good evidence that you were other than temporary).

Only a NJ tax practitioner could tell you the chances of your being audited, although most states would probably not audit in such a situation.