Operational Audit is a systematic review of effectiveness, efficiency, and economy of operations. The processes that occur daily in a company can be many. And, obviously, from management, it is almost impossible to control everything and ensure perfection in daily operations. Hence, the need for an operational audit arises. The purpose of an operational audit is to help the management to detect and correct deficiencies in the business processes.
OBJECTIVES OF OPERATIONAL AUDIT
- The primary objective is to assess the quality of operations and whether it is in line with the company’s prescribed policies/plans.
- It also provides assistance in taking loans from lenders, the decision to invest, insurance claims, ascertainment of purchase consideration of business and uncovering of frauds and errors, etc.
- Identify which areas should reduce costs and support the processes with the greatest needs.
- Analyze administrative, managerial, and operational aspects on which appropriate modifications will be in order to improve business operations.
- Integrity: Withstand pressures that may be exerted and take care to comply with any legal requirements.
- Fair Presentation: Present all consequences legitimately and report important concerns.
- Due Professional Care: Use diligence, due care, and reasoned judgments in every situation.
- Confidentiality: Keep information secure, and protect confidential or sensitive information.
- Independence: Preserve impartiality and keep actions and reporting bias-free.
- Evidence-Based: It depends on a fact-based approach to reach reliable conclusions.
Understanding the true status of operations is the basis for a healthier, more competitive, and more profitable organization.
Process flow for management of Operational Audit:
- Establishing Objectives: Considering the features of products, projects, procedures, and any modifications to them. Take into account management system needs contractual and legal necessities and other requirements.
- Establishing the Audit Program: Classify the account abilities of the audit program manager and establish his or her capability of the person. Determine the scope and potential risks, then set processes and identify resources.
- Implementing the Audit Program: Describe the purposes, scope, and criteria, and select the audit team members and assign accountability to the audit team leader. Manage the outcome and records.
- Monitoring the Audit Program: Measure conformity with the plan, strategy, and purposes, and then evaluate the performance of the audit team members and the capability of the audit teams to execute the strategy.
- Reviewing and Improving the Audit Program: Assess if purposes have been attained. The review should consider consequences and leanings, conformity with processes, the evolving needs and outlooks of interested parties, records, alternative or new auditing methods, the efficiency of the procedures to address associated risks, and privacy and information security matters relating to the audit program.
How ASC can help?
- Assistance in the identification of the area of weakness that violates or has the potential to violate legislative business policies, regulations, and legal requirements.
- ASC with its advanced and analytical audit approach focuses on internal control and operational process to ensure maximum productivity.
- Offering our client results that will provide streamlined operations that are safe and generates his ROIs.
- Assist in Audit planning, execution, and review.
- Assist in follow up activities, analysis, and reporting.