In __ type audits, objectives are defined by the audit organization and may differ from audit to audit?

In __ type audits, objectives are defined by the audit organization and may differ from audit to audit?

• A. Financial
• B. Compliance
• C. Reliability
• D. Performance

Answer: (D)

In performance-type audits, the objectives are defined by the audit organization and can differ from one audit to another. These audits focus on evaluating how well programs or operations achieve their goals, looking at economy, efficiency, and effectiveness. Because the auditor determines the questions to ask and the specific performance issues to evaluate, the objectives are flexible and tailored to each audit's purpose. In contrast, financial audits follow established accounting standards and focus on whether financial statements are presented fairly; compliance audits check adherence to laws and regulations with objectives tied to those requirements. Reliability concerns relate to the trustworthiness of information, not a separate audit type. So the best fit for the idea that objectives are set by the audit organization and may vary by audit is the performance-type audit.

In performance-type audits, the objectives are defined by the audit organization and can differ from one audit to another. These audits focus on evaluating how well programs or operations achieve their goals, looking at economy, efficiency, and effectiveness. Because the auditor determines the questions to ask and the specific performance issues to evaluate, the objectives are flexible and tailored to each audit's purpose.

In contrast, financial audits follow established accounting standards and focus on whether financial statements are presented fairly; compliance audits check adherence to laws and regulations with objectives tied to those requirements. Reliability concerns relate to the trustworthiness of information, not a separate audit type. So the best fit for the idea that objectives are set by the audit organization and may vary by audit is the performance-type audit.