What is an Operational Audit?

Taking your car to get its oil changed is one of the best ways to ensure longevity of your vehicle. Many times, when the car’s hood is popped, a trained mechanic will look around to see if anything else is amiss. These maintenance check-ups are similar to an operational audit for an organization; an operational audit is a review of efficiency and effectiveness of an organization.

Operational Audits and the Benefits to An Organization

An operational audit is performed when those in management of an organization sense that the daily operations can be streamlined or improved upon. During an operational audit, the organization’s managers will meet with an auditor to develop a process for overall analysis of the company. Stated objectives for conducting the operational audit will have most-likely been set by management, and therefore the road to achieving desired objectives can be met through the process of the audit. The operational audit process presumes that management has been working to align objectives with business processes and supportive administrative and technical functions, or this could very well be one of the goals of the operational audit process. The operational audit is a future-oriented, systematic, and independent evaluation of organizational activities.

Operational Audit Conducted by External Auditor of Internal Processes

Generally, these audits are conducted at the request of the management and with the goal to improve overall efficiency and effectiveness within an organization. It is helpful for businesses to reach out to external auditors when conducting operational audits because it puts the process of understanding internal organizational functions into objective eyes. An external perspective can often see where processes can be streamlined and made to be efficient and effective. During an operational audit, an auditor works to conduct the entire process by gaining insight into the goals of the organization while remaining unbiased. Often a company may be familiar with routine operations and therefore may find it difficult to conduct an unbiased audit covering the scope and desires of the business entity. Therefore, an operational audit process is useful for the company to accurately gaze into the policies and procedures of the company in order to produce an optimum level of effectiveness and efficiency. A lack of efficiency and effectiveness could translate to fewer sales or increased operational costs, which sometimes mean the inability of the business to compete and stay in business.

Operational Audit for Efficiency and Effectiveness

Typical collecting of financial statements, compliance, and regulations are not a part of an operational audit. Instead, the goal is to identify areas for an entity to improve effectiveness while ensuring processes are efficient in operations. The goals of an operational audit depend widely on the activity being audited, the organization itself, and the process. Have you considered an operational audit? If you are considering this type of audit to peer into your organization to accomplish your objectives as well as turn inputs into outputs easily, we can help.

Experienced Southeastern US Audit Firm

Operational Audits of governmental and business entities are routine practice at The Baird Audit Group. We pride ourselves on upholding the rigors of the audit, from planning to resolution of auditing reports. Located in Augusta, Georgia, we are ready to help you with your audit today,  call us at (706) 855-9500 or reach out via our website.

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