What distinguishes a Performance Audit from a financial audit?

A Performance Audit is distinguished from a financial audit primarily by its focus and intent. Performance audits evaluate the efficiency and effectiveness of various programs and processes, often assessing qualitative criteria such as the achievement of goals, responsiveness, and impact. This type of audit looks beyond just the numbers to analyze whether resources are being used effectively to achieve desired outcomes.

In contrast, financial audits concentrate on the accuracy and reliability of financial statements and transactions, ensuring that financial records are presented fairly in accordance with applicable standards. They are mainly concerned with compliance and the proper accounting of financial resources.

By focusing on qualitative criteria, performance audits provide a broader perspective that includes evaluating performance measures, program efficacy, and overall management effectiveness related to resource use, which is not a primary focus of financial audits. This distinction highlights the differing objectives and methodologies employed in each type of audit.