The 3 types of Audits: Compliance Audit, Operational Audit and Financial Audit.

In this video, I explain three types of audits: Compliance audit, operational audit and financial audit. ✔️Accounting students and CPA Exam candidates, check my website for additional resources: https://farhatlectures.com/ 0:00 Introduction This video explains the differences between three types of audits: operational, compliance, and financial statement audits. Here's a quick breakdown: Operational Audit (0:28): This assesses the efficiency and effectiveness of an organization's procedures. It's subjective and can cover various areas like organizational structure or marketing. An example is assessing the efficiency of inventory management (3:22). Compliance Audit (4:31): This checks if a company adheres to rules, regulations, or guidelines set by an outside party or higher authority. Examples include verifying minimum wage laws (5:08) or adherence to loan covenants (5:23). Financial Statement Audit (9:36): This assesses whether financial statements comply with specific criteria like GAAP or IFRS (9:50), looking for material errors or misstatements (10:06). An example is auditing Tesla's financial statements (11:03). #cpaexam #accountingstudent #auditcourse