Are there substantive differences between financial auditing and performance auditing?

There are substantive differences between financial auditing and performance auditing. Financial auditing primarily focuses on the accuracy and completeness of financial statements, ensuring that reported financial data adheres to generally accepted accounting principles (GAAP) or relevant financial reporting standards. The main goal is to provide assurance that the financial statements are free from material misstatement, whether due to fraud or error.

On the other hand, performance auditing takes a broader approach, evaluating the effectiveness and efficiency of an organization's operations, programs, or projects. It assesses whether resources are being used effectively to achieve goals and objectives, aligning with the principles of economy, efficiency, and effectiveness. Performance audits may examine aspects such as program outcomes, compliance with laws and regulations, and operational processes to provide insights for improvement.

The focus on different objectives and the varied aspects of evaluation in these two types of audits underline their substantive differences, making the assertion that there are indeed significant distinctions accurate.