What are the three types of audits?

What are the three types of audits?

• A. Financial, Compliance, and Attestation
• B. Financial, Performance, and Attestation
• C. Financial, Operational, and Attestation
• D. Financial, Program, and Attestation

Answer: (B)

Audits are categorized by the subject and type of assurance they provide. The three main types commonly taught for this context are financial audits, performance audits, and attestation engagements. A financial audit examines whether financial statements are presented fairly and free of material misstatement under the applicable accounting framework. A performance audit assesses how efficiently and effectively a program or operation uses resources to achieve its goals, often identifying improvement opportunities. An attestation engagement provides independent assurance on a specific subject matter or assertion—such as a process, internal controls, or compliance with criteria—rather than on financial statements alone. This combination covers both financial reporting and non-financial assurance needs, including evaluations of program performance, making it the best-fit trio for defining the three types of audits in this setting. Other groupings exist in practice, but they don’t align as neatly with the standard three-way framework used here.

Audits are categorized by the subject and type of assurance they provide. The three main types commonly taught for this context are financial audits, performance audits, and attestation engagements. A financial audit examines whether financial statements are presented fairly and free of material misstatement under the applicable accounting framework. A performance audit assesses how efficiently and effectively a program or operation uses resources to achieve its goals, often identifying improvement opportunities. An attestation engagement provides independent assurance on a specific subject matter or assertion—such as a process, internal controls, or compliance with criteria—rather than on financial statements alone. This combination covers both financial reporting and non-financial assurance needs, including evaluations of program performance, making it the best-fit trio for defining the three types of audits in this setting. Other groupings exist in practice, but they don’t align as neatly with the standard three-way framework used here.