Which of the following is NOT one of the major differences between financial and performance auditing?
A) The financial audit is oriented to the past, whereas a performance audit concerns performance for the future.
B) Financial audits deal with the information in the financial statements, whereas performance audits are concerned with the information in the ledgers.
C) The financial audit is distributed to many readers, whereas the performance audit report goes to a few managers.
D) Financial audits are limited to matters that directly affect the financial statements, whereas performance audits cover any aspect of efficiency and effectiveness.

Question

Quizplus · Accepted Answer

The statement "Financial audits deal with the information in the financial statements, whereas performance audits are concerned with the information in the ledgers" is not accurate. Performance audits do not focus on the information in the ledgers; rather, they examine the effectiveness and efficiency of operations or programs. Therefore, option B is the correct answer. Option A is correct because financial audits provide an opinion on whether the financial statements are presented fairly and accurately, while performance audits assess whether objectives are being met. Option C is correct because typical readers of financial audit reports are a wider audience, while performance audit reports are mostly used by managers. Option D is correct because financial audits are limited to financial matters impacting the financial statements, while performance audits cover any aspect of efficiency and effectiveness.

Which of the Following Is NOT One of the Major