Objectives
- To appraise the effectiveness and efficiency of a division, activity, or operation of the entity in meeting organizational goals.
- To understand the responsibilities and risks faced by an organization.
- To identify, with management participation, opportunities for improving control.
- To provide senior management of the organization with a detailed understanding of the result
Steps of operational audit
Generally Operational Audit involves following five steps;
- Preliminary preparation
- Field Survey
- Audit Programme Development
- Audit Execution
- Reporting and Follow-up
Advantages
- In addition to making the business more efficient and profitable in the long run.
- An operational audit almost always provides a company with some new, fresh perspectives.
- It makes executives aware of problems that might not have been found otherwise and lets them evaluate risks for the future.
- Managers also can use results to motivate employees, as the company always has something to work toward at the end of the process.
Disadvantages
- Reviewing operational processes can be very time consuming and costly.
- When employees and managers are working with the auditor, they can't do other activities that might benefit the business, so projects or production might slow temporarily.
- Sometimes, the changes that a business makes are hard for workers to get used to, which can increase conflicts or confusion.
|
