Economy and efficiency audits examine a governmental unit's managerial and administrative practices for economy and cost efficiency.

Economy and efficiency audits examine a governmental unit's managerial and administrative practices for economy and cost efficiency.

• A. Financial statements
• B. Managerial and administrative practices for economy and cost efficiency
• C. Program objectives
• D. Environmental compliance

Answer: (B)

Economy and efficiency audits focus on how a government unit manages its resources to achieve economy and cost effectiveness. They look at managerial and administrative practices—policies, procedures, decision-making, internal controls, and how resources are planned and used—to determine whether costs are minimized and performance is optimized. This scope distinguishes them from financial statement audits, which assess the accuracy of financial reports; from programs-focused work that evaluates whether objectives are met; and from environmental compliance, which checks adherence to environmental laws. So, the choice describing managerial and administrative practices for economy and cost efficiency best captures what these audits examine.

Economy and efficiency audits focus on how a government unit manages its resources to achieve economy and cost effectiveness. They look at managerial and administrative practices—policies, procedures, decision-making, internal controls, and how resources are planned and used—to determine whether costs are minimized and performance is optimized. This scope distinguishes them from financial statement audits, which assess the accuracy of financial reports; from programs-focused work that evaluates whether objectives are met; and from environmental compliance, which checks adherence to environmental laws. So, the choice describing managerial and administrative practices for economy and cost efficiency best captures what these audits examine.