Operational Auditing Essay Example | Topics and Well Written Essays - 5000 words

Operational Auditing - Essay ExampleAn available scrutinize is a review of any part of an organizations operating procedures and methods for the purpose of evaluating efficiency and effectiveness. At the completion of an useable audit, management normally expects recommendations for improving operations. An example of an operational audit is evaluating the efficiency and accuracy of treating 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 film 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, th e 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.1The 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 organizations (or part of an organizations) effectiveness, efficiency, and economy of operations under managements control, and reporting to appropriate persons the results of the evaluation along with recommendations for improvement. Operational auditing focuses on management goals, initiati ves and strategic plans to generate innovative solutions for the challenges that vitrine 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.EffectivenessBefore an operational audit for effectiveness can be performed, there must be specific criteria for what is meant by effectiveness. Effectiveness is the degr ee to which the organizations objectives are accomplished. An example of an