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usmc2rn usmc2rn
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Discuss three major differences between operational and financial auditing.
Textbook 

Auditing and Assurance Services


Edition: 17th
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tk9790tk9790
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•   Purpose of the audit. Financial auditing emphasizes whether historical information was correctly recorded, whereas operational auditing emphasizes effectiveness and efficiency. Financial auditing is oriented to the past, while operational auditing focuses on improving future performance.
•   Distribution of the reports. For financial auditing, the report typically goes to many external users of financial statements, such as stockholders and bankers, whereas operational audit reports are intended primarily for management. The widespread distribution of financial auditing reports requires a well-defined structure and wording. For operational audits, the reports have limited distribution and the reports vary from audit to audit.
•   Inclusion of nonfinancial areas in operational auditing. Operational audits cover any aspect of efficiency and effectiveness in an organization, whereas financial audits are limited to matters that directly affect the fairness of financial statement presentations.
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