What are 3 types of audit?

Audit is independent examination of information to provide assurance on the information or examined subject matter.

There are 3 types of audits.

Historical financial statements audit. This audit involves independent examination of entity’s financial statement in order to issue opinion on their truth and fairness.

Compliance audit. This type of audit involves performing audit procedures to determine if the entity has complied with relevant laws and regulation. For example auditor may audit the entity to see if it complies with environment laws, tax laws or money laundering laws. In many cases compliance audit is performed by internal auditor to help the organisation to avoid risk of fines and punishment due to going contrary to laws and regulation.

Value for money audit. This is audit which aim to establish economy, effectiveness and efficiency of organisation operations to see if they are in line with acceptable benchmarks. Value for money audit is conducted in the situation in which it is difficult to measure the return of funds spent.