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    Objectives and Phases of Operational Audits

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    Chloe Anne Torres
    The document summarizes the key objectives and phases of operational audits. [1] Operational audits aim to evaluate the efficiency, effectiveness, economy and ethics of business operations. [2] They assess whether procedures are adequate to promote and monitor these factors. [3] Audits are conducted in three phases - planning, fieldwork and review, and reporting.

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    Objectives and Phases of Operational Audits

    Uploaded by

    Chloe Anne Torres
    148 views12 pages
    The document summarizes the key objectives and phases of operational audits. [1] Operational audits aim to evaluate the efficiency, effectiveness, economy and ethics of business operations. [2] They assess whether procedures are adequate to promote and monitor these factors. [3] Audits are conducted in three phases - planning, fieldwork and review, and reporting.

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    The document summarizes the key objectives and phases of operational audits. [1] Operational audits aim to evaluate the efficiency, effectiveness, economy and ethics of business operations. [2] They assess whether procedures are adequate to promote and monitor these factors. [3] Audits are conducted in three phases - planning, fieldwork and review, and reporting.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    148 views12 pages

    Objectives and Phases of Operational Audits

    Uploaded by

    Chloe Anne Torres
    The document summarizes the key objectives and phases of operational audits. [1] Operational audits aim to evaluate the efficiency, effectiveness, economy and ethics of business operations. [2] They assess whether procedures are adequate to promote and monitor these factors. [3] Audits are conducted in three phases - planning, fieldwork and review, and reporting.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    OBJECTIVES AND PHASES OF OPERATIONAL

    AUDITS

    Presented by:
    Ma. Nicole Atienza & Chloe Anne Torres
    What is Operational Auditing: Key Objectives of
    Operational Audits
    • Are distinguished from other types of internal audit by
    having an objective to review effeciency, effectiveness,
    economy and ethics (known as the 4E’s).
    • they may also have other objectives such as assessing
    compliance with regulation or testing the controls of an
    information systems, but the direct examination of one or
    more of the 4Es is what is important.
    What is Operational Auditing: Key Objectives of Operational Audits

    The aim of using an operational auditing approach is to


    find out:
    • Whether business operations are being managed in an
    economic, effecient, effective and ethical manner(4Es).
    • Whether procedures for promoting and monitoring the
    4Es are adequate.
    • Whether real environments can be made - not just
    assessing whether there is compliance or non-
    conformance.
    Another term commonly used is “Performance Auditing” which has
    fundamentally the same objective:

    OPERATIONAL AUDITING PERFORMANCE AUDITING


    An audit of the use of An audit of the management
    resources to assess whether of an organization, program,
    those resources are being or function to identify whether
    used in the most effecient it is being carried out in an
    and effective ways to fulfill an effecient and effective
    organization’s objectives. manner and whether
    management practices
    promote improvement.
    Phases of the Operational Audit

    Audit engagements are performed in three general phases:


    Planning, Fieldwork & Review, and Reporting.
    Phase 1: Planning
    • Select engagement team
    • Perform engagement risk assessment with input from the
    client, management, and audit team members
    • Develop audit scope, objectives, timing and necessary
    resources to conduct the audit
    • Document anticipated deliverables
    • Prepare audit program
    • Hold entrance conference with client
    What must go right for them to succeed?

    • A successful audit has management support, starts with


    sufficient preparation, is avoids antagonizing the people it
    is supposed to help, and results in a course correction or
    other action.
    Risk Factors
    The following factors should receive due consideration
    while planning:
    • Size of the company and nature of its operations.
    • Accounting system, internal control and adherence to
    standard.
    • Environment in which the company operates.
    • Previous experience with the client; and
    • Knowledge of client’s business.
    Phase 2: Fieldwork & Review
    • Gather information about the process to be audited
    • Document and evaluate processes and internal controls
    • Interview client staff members
    • Develop and perform detailed testing and analysis
    • Perform other audit procedures to meet audit objectives
    • Review work papers for completeness and accuracy
    • Evaluate audit evidence and develop conclusions
    • Communicate with client on an orgoing basis
    Types of Audit Evidence
    • Testimonial
    • Observation
    • Document Inspection
    • Recalculation/Reperformance
    • Professional Skepticism
    • Workpapers
    • Flowcharts
    • Internal Control Questionnaire
    • Condition of Workpapers
    • Electronic Workpapers
    Phase 3: Reporting
    • Document strengths and opportunities for improvement
    • Communicate with client management regarding audit
    results
    • Develop preliminary observations and recommendations
    • Prepare draft audit report
    • Obtain management’s plan of action to adress issues
    • Prepare final audit report
    • Evaluate audit performance
    • Follow up on implementaion of action plans
    ...and here ends our report

    Thank You For Listening!!!

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