StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Operational Auditing - Essay Example

Cite this document
Summary
Planning," means developing a general strategy and a detailed approach for the expected nature, timing and extent of the audit. The auditor should plan the audit work so that the audit will be performed in an effective and timely manner. There are several purposes of the planning procedures…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER99% of users find it useful
Operational Auditing
Read Text Preview

Extract of sample "Operational Auditing"

Download file to see previous pages

An operational audit is a review of any part of an organization's operating procedures and methods for the purpose of evaluating efficiency and effectiveness. At the completion of an operational audit, management normally expects recommendations for improving operations. An example of an operational audit is evaluating the efficiency and accuracy of processing payroll transactions in a newly installed computer system. Another example, where most accountants would feel less qualified, is evaluating the efficiency, accuracy, and customer satisfaction in processing the distribution of letters and packages by a company such as federal express.

Because of the many different areas in which operational effectiveness can be evaluated, it is impossible to characterize the conduct of a typical operational audit. In one organization, the auditor might evaluate the relevancy and sufficiency of the information flow in processing sales. In operational auditing, the reviews are not limited to accounting. They can include the evaluation of organization structure, computer operations, production methods, marketing, and any other area in which the auditor qualified.

1 The conduct of an operational audit and the reported results are less easily defined than for either of the other two types of audit.effeciency and effectivene. In addition, establishing criteria for evaluating the information in an operational audit is an extremely subjective matter. In this sense, operational auditing is more like management consulting than what is generally regarded as auditing.Operational Auditing is a non-financial audit that involves a systematic process of evaluating an organization's (or part of an organization's) effectiveness, efficiency, and economy of operations under management's control, and reporting to appropriate persons the results of the evaluation along with recommendations for improvement.

Operational auditing focuses on management goals, initiatives and strategic plans to generate innovative solutions for the challenges that face the units and their managers. The process verifies the existence and effectiveness of management controls that are meant to ensure that the unit meets its operating objectives. The scope of the audit is expanded beyond the verification of financial controls or compliance with policies. Operational auditing looks for the existence of management controls (such as leadership, employee empowerment, teamwork, risk assessment, information, communication, resource allocation, productivity measurement, etc.) that support the financial controls in attaining goals set by the units.

Desired results of operational audits include discovering innovative solutions, promoting creativity and new ideas, and recommending operational improvements.Effectiveness:Before an operational audit for effectiveness can be performed, there must be specific criteria for what is meant by effectiveness. Effectiveness is the degree to which the organization's objectives are accomplished. An example of an

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Operational Auditing Essay Example | Topics and Well Written Essays - 5000 words”, n.d.)
Operational Auditing Essay Example | Topics and Well Written Essays - 5000 words. Retrieved from https://studentshare.org/miscellaneous/1521478-operational-auditing
(Operational Auditing Essay Example | Topics and Well Written Essays - 5000 Words)
Operational Auditing Essay Example | Topics and Well Written Essays - 5000 Words. https://studentshare.org/miscellaneous/1521478-operational-auditing.
“Operational Auditing Essay Example | Topics and Well Written Essays - 5000 Words”, n.d. https://studentshare.org/miscellaneous/1521478-operational-auditing.
  • Cited: 0 times

CHECK THESE SAMPLES OF Operational Auditing

Budgeting Hope and Fraser

Over the years, a widely used device for managerial control is the budget.... Budgeting is the formulation of plans for a given period stated in numerical terms in the future.... Budgeting is plans converted into money availabilities.... In real sense, budgeting is at the hearth of the administrative process....
8 Pages (2000 words) Essay

External Auditing and Corporate Governance

More specifically, the paper focuses on the practice of corporate governance in the United Kingdom and the countries such as South Africa, Australia, US,… Since the rules and the laws of every country and region differ from one another, there are differences in the practice of corporate governance and external auditing too. With regards to corporate governance, a huge debate is raging the world of governance these days as to how the level of trust can be improved in our communities in regards to the governance bodies of companies, aboriginal communities and charitable corporation....
14 Pages (3500 words) Essay

Audit to Draw the Actual Business Scenario

Usually a qualified auditing procedure is also applicable in case of stock and inventory management because this is also an area where high chances of corruption take place.... Audit can be defined as the inspection which is generally organized for the official purpose and the investigation is focused mainly on accounting practice of a company....
9 Pages (2250 words) Essay

Corporate Governance Principles of National Grid Transco

There are certain requirements and expectations of corporate governance that needs to be addressed appropriately by any organization.... Corporate governance basically means relations, processes and… The governance structure mainly helps to identify the wide array of distribution of responsibilities and rights amongst team members....
12 Pages (3000 words) Essay

The US Federal Law - Sarbanes-Oxley Act 2002

This paper "The US Federal Law - Sarbanes-Oxley Act 2002" focuses on the U.... .... federal law which was enacted and approved on July 30, 2002.... It came amidst corporate scandals and economic downturn.... It was designed to protect investors and improve their confidence in the market.... nbsp; … As Holt (2008) puts it, when President Bush signed the act into law he indicated that it will be used to act against those who have significantly reduced confidence in the US stock market, to expose corruption, punish those who seek to do wrong and protect the rights and interests of workers and investors....
12 Pages (3000 words) Research Paper

Auditing Today and Tomorrow, the Price Waterhouse Coopers

hellip; According to this report, PWC put emphasis on the transparency during the whole process of auditing.... The report discusses transparency in auditing as that element which provides accurate and valid data maintains the integrity and gives an opportunity to market the services.... his PWC report indicates that the currently used auditing practices are more valuable to the corporate management than they are too small time investors.... According to the report, the auditors and government regulators are the main barriers to changes in auditing and corporate reports....
8 Pages (2000 words) Assignment

Auditing Today & Tomorrow

Transparency in auditing gives it an opportunity to market the services, and demonstrate its role in relaying out data.... The report denotes that the current auditing practices are valuable for corporate management, as opposed to small-time investors, and they do not cover areas such as the model of the business operation.... he report denotes that the main barriers to changes in auditing and corporate reports are the auditors and government regulators....
8 Pages (2000 words) Assignment

Cyrmru Capital Investments

This coursework "Cyrmru Capital Investments" focuses on understanding the potential functionality risks linked with spreadsheet usage and how the continued reliance of CCI over its 50,000 operational spreadsheets might turn out to be jeopardy against its maintenance of long-term survival.... ith this concern, the provided context illustrates a midrange investment banking organization named Cyrmru Capital Investments (CCI), which is involved in using spreadsheet technology for handling all its financial and operational functions....
24 Pages (6000 words) Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us