What Is the Difference Between Financial Audit and Project Audit?

If you are handling a growing business or leading a major initiative, you have likely come across both financial audits and project audits. It is true that they both cover reviews and reports. Yet, they focus on entirely distinct fields as we outline as below:

A Closer Look at Project Audits

So, what is a project audit? Simply put, it is a focused review of a specific project. It checks how well that project was planned and managed as well as delivered. Instead of looking at the company as a whole, project audits zoom in on timelines, goals, scope, quality, and risk handling in addition to even vendor selection. Within this context, they are particularly beneficial in the below situations:

• You’re mid-project and want to make sure that everything is on track
• The project just wrapped up and you are looking for lessons learned
• You are trying to improve project delivery across the board

There are many types of project audits, covering quality, risk, procurement, and performance reviews. Each one targets a unique aspect of the project lifecycle.

What About Financial Audits?

On the other hand, a financial audit simply evaluates the company’s financial statements and reporting practices. It has a confirming function on whether the books are accurate, fully compliant, and trustworthy. This type of audit is generally done once a year and looks at the big picture, not just one piece of it.

It is correct that a project audit might ask, “Did this initiative follow the plan?”. On the contrary, a financial audit asks, “Do these numbers represent our business accurately?”

As a quick side-by-side view:

• Project Audit: Project-specific, checks process and delivery, any time during the project
• Financial Audit: Organization-wide, checks financial integrity, generally annual

Which One Do You Need?

The answer changes in parallel to your specific goals. If you would like to assess a project’s progress or performance, it is better to go with a project audit. If the focus is on financial health and regulatory compliance, the financial audit is the way to go. If you need any assistance, contact Dimov Audit today.