Certified Government Financial Manager (CGFM) 2025 – 400 Free Practice Questions to Pass the Exam

The correct choice focuses on evaluating the economy, efficiency, and effectiveness of government programs, which is a fundamental characteristic of performance audits. Performance audits are specifically designed to assess how well government programs are operating and whether they are achieving their intended outcomes. This type of audit goes beyond mere compliance with regulations and financial accuracy; it seeks to understand if resources are being utilized efficiently and if the programs in question are producing the desired results for the public.

This emphasis on program performance allows auditors to provide valuable insights that can inform decision-making and lead to improvements in government operations. By looking at economy (the cost of resources used), efficiency (how well resources are transformed into results), and effectiveness (the degree to which objectives are met), performance audits contribute significantly to accountability and continuous improvement in government services.

The other options do not align with the essence of performance audits. For example, focusing solely on compliance misses the broader evaluative scope that performance audits bring. Moreover, while performance audits can be conducted by various auditors, including internal auditors, they are not restricted to external auditors alone. Additionally, performance audits are distinguished from financial audits, which primarily assess the accuracy and compliance of financial statements, rather than the operational aspects of programs.