Do financial auditing and performance auditing serve different goals and techniques?

Financial auditing and performance auditing indeed serve different goals and techniques, which makes the assertion that they are distinct correct.

Financial auditing primarily focuses on evaluating an organization's financial statements, ensuring they are accurate, complete, and prepared in accordance with relevant accounting standards. The primary goal of financial auditing is to provide assurance to stakeholders, such as investors and regulators, that the financial reports are free from material misstatement. The techniques involved in financial auditing typically include examining financial records, conducting tests of transactions, and evaluating internal controls.

On the other hand, performance auditing aims to assess the efficiency, effectiveness, and economy of programs and operations. The goal of performance auditing is to provide insights into how well an organization is meeting its objectives and using resources, rather than just verifying financial accuracy. Techniques for performance auditing can include program evaluation, cost-benefit analysis, and performance measurement, focusing on outcomes and the benefits derived from programs rather than just compliance with financial reporting standards.

The distinction between the two audit types illustrates their different focuses: financial audits zero in on financial accuracy, while performance audits evaluate operational effectiveness and resource utilization. Thus, recognizing that these audits serve different aims and employ diverse methodologies is crucial for understanding their roles in organizational governance and accountability.