Operations Audit

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Operational Audit Best Practices A methodology to Conduct Operational Audit in Public Sector Organizations What is Operational Audit?
Operational Audit is a methodology for assessing the conformity of implementing the procedures and methodologies set forth in the department’s instructions, regulations or documents. Operational audit is performed by specialized auditors. Upon completion of the auditing process, a report of findings with recommendations is submitted. Operational audit contributes to improving implementation, complying with the government organizations’ procedures and providing the management with points of nonconformity so that corrective and preventive actions can be taken, thereby improving the efficiency and effectiveness of operations and increasing customers’ satisfaction, as shown in Figure 1. Operational Audit Corrective actions by the management Increase customer satisfaction 10. Follow up

- How to conduct Operational Audit? to increase Enable management to identify ways operational control. 1. Select procedures or departments whose operations are to be audited

2. Determine audit objectives

3. Select the audit team and determine the schedule

4. Define the operations to be audited

5. Determine audit scope

6. Prepare audit checklist

7. Inform employees to be audited

8. Implement auditing

9. Prepare the audit summary report

Identify points of nonconformity in procedure implementation

Increased efficiency and effectiveness


Select procedures or departments whose operations are to be audited

Figure 1: Impact of operational audit on increasing customers’ satisfaction

This step is considered the basic stage in which the procedures or departments whose operations are to be audited are selected, which significantly affects all subsequent steps of the auditing process. This is accomplished by using the following criteria:  The audit added value: it refers to the impact that will result from improving the implementation of the procedure whose operations are to be audited, noting that priority will be given to the procedures or departments that have never been audited. Impact: priority is given to the procedures or departments that have the highest impact on economy, efficiency or effectiveness. Risk: the risks associated with the implementation of procedures in conformity with the specified criteria and regulations are analyzed. The more they are associated with the public interest, the more important is the auditing process.

Why Operational Audit?
Identify poor work practices in order to improve them. Verify that employees implement operations in conformity with instructions and regulations, which guarantees achieving the desired effectiveness and efficiency. Assist in the evaluation of quality control procedures adopted in the organization. Evaluate implementation processes in the organization.


Honesty and integrity

Signs of risks associated with operations Financial loss due to implementation not conforming operations to the adopted criteria and regulations. The emergence of new or urgent activities or sudden change in working conditions (requirements, demand). The complication of administrative structure, leading to discrepancies between the responsibilities. Lack of independent, reliable and updated information on the government department’s efficiency and the effectiveness. Maintain the confidenttiali ty of information

Ability to work as part of a team Ability to assume responsibility and make decisions


Objectivity and impartiality

Operational auditors qualities

Experience in operational audit

Figure 2: personal qualities that the operational auditors should possess 4

Define the operations to be audited


Determine audit objectives

Objectives of operational audit are determined at this stage. It should be noted that formulating the operational audit objectives significantly affects the nature of the...
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