External audit. A parallel between the financial audit and the performance audit

Author:Prof. Univ. Ileana NIŞULESCU, PhD, Mariana Martin DAVID, PhD Student

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Keywords:financial audit, performance audit, economy, efficiency, effectiveness

Abstract:
This paper envisages a comparative study of the financial and performance audit through a parallel analysis of the basic concepts and the operation manner of the two audit types. We consider that an approach from this perspective is significant and up-to-date, due to the fact that there is not in our country a tradition of audit practicing and, especially, of the performance audit and, therefore, there is no diversified research literature addressing audit. In this context, it is worth mentioning the effort of the Chamber of Financial Auditors in Romania that acted for the alignment of the financial audit in Romania to the International Audit norms and standards, effected through national assimilation of the audit international norms and of the ethic conduct code issued by the International Federation of Accountants, a fact that largely opened the gates to knowledge and to the enforcement of the financial audit in our country. \r\nThis paper is meant to represent a contribution to understanding the performance audit and, consequently, we have considered opportune to approach it by comparing the performance audit with the financial audit, because the financial audit, being better known, may stand as a landmark, and thus, by reference to it, a better understanding of the performance audit is possible. \r\nAt the same time, we thought that, taking into account that in recording and processing accounting information most entities rely on information technologies, it is appropriate to make several remarks on the impact of information media both in financial audit missions and in reference to the performance audit. \r\nFollowing the comparative analysis we have noticed a number of differences and resemblances, and the conclusion is that, both the financial and the performance audit, even though they have some resemblances, are actually different domains, each possessing their own working techniques and procedures. The differences are evident even from the purpose and objectives of each of the two audit types as well as from the manner in which the reports are drawn up at the finalization of the mission. In the same way, one notices that, if in the case of the financial audit, the field in which it develops is very standardized, in the case of the performance audit, the activity must be much more creative and the analyses have, many times, a suggestive representation (graphics, charts etc. are used). Likewise, although both audit types use audit proofs and similar techniques for obtaining them, the stress considered is different. Thus, in the case of the financial audit, the auditors’ attention is focused on the financial standings, in comparison with the performance audit where stress in laid on the economy, efficiency and effectiveness analysis in the audited domain.

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