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Operations Auditing: Audi26

The document discusses operational audits including definitions, objectives, key performance indicators, principles, ISO 9000 standards, and benefits. It outlines primary goals of audits such as influencing positive change, reviewing internal controls, and understanding risks. The types of risks associated with business are also covered.

Uploaded by

Pricia Abella
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
114 views

Operations Auditing: Audi26

The document discusses operational audits including definitions, objectives, key performance indicators, principles, ISO 9000 standards, and benefits. It outlines primary goals of audits such as influencing positive change, reviewing internal controls, and understanding risks. The types of risks associated with business are also covered.

Uploaded by

Pricia Abella
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Operations

Auditing
audi26
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Liciel Herrera
March 13, 2021
Operational Audit
Definition

A systematic process of evaluating 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
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recommendations for improvement


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Objective of Operational Audit
Definition

Objectives can vary depending on the type


of organization and its KPIs, or whether
the audit is being conducted to answer a
specific concern from challenges arising
in areas like human resources, customer
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relations, or manufacturing slow downs.


What is KPI?

A Key Performance Indicator is a measurable value that


demonstrates how effectively a company is achieving key
business objectives. Organizations use KPIs at multiple levels
to evaluate their success at reaching targets. High-level KPIs
may focus on the overall performance of the business, while
low-level KPIs may focus on processes in departments such
as sales, marketing, HR, support and others..
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Auditing
Principles
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Auditing Principles
1. Integrity: Withstand pressures that may be exerted and take care to comply with any
legal requirements.

1. Fair Presentation: Present all results fairly and report significant concerns.

1. Due Professional Care: Use diligence, due care, and reasoned judgments in every situation.

1. Confidentiality: Keep information secure, and protect confidential or sensitive


information.
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1. Independence: Maintain impartiality and keep actions and reporting bias-free.

1. Evidence-Based: Depend on a fact-based approach to reach reliable conclusions.


What is ISO 9000?

ISO 9000 is a series or family of standards issued by ISO, the International


Organization for Standardization, that describes best practices for quality
management. The standards cover all aspects of organizations including facilities,
people, training, services, and equipment. When organizations follow the standards,
they demonstrate that they can consistently provide real and transactional
deliverables that meet customer needs and adhere to regulatory requirements. The
standards can also help organizations improve the quality of deliverables, and
thereby increase customer satisfaction.

19011: This document provides guidance on conducting internal and external audits to
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ensure that quality systems conform to 9000 guidelines.


Benefits of Operational Audit

Conducted by an internal or external auditor, audits are objective. They supply a fresh
perspective on the good and not-so-good aspects of organizational practices and
processes. The final report should make management aware of problems they might
not have otherwise understood, and gives them a knowledge-base for making
improvements. Executives can also use organizational audit results to motivate team
members and emphasize existing or new goals. Subsequent actions can then lead to
greater profitability, legal compliance, and employee satisfaction in the long term.
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Benefits of Operational Audit

The Individual can The End User or The World benefits

continuously improve Consumer receives from a better, more

their ability to apply more cost efficient sustainable future

knowledge and skills and high-quality

to deliver the products or services.

intended results.
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Influence Review Internal Understand
Positive Change Controls Risks

Primary
Goals
Identify Inform Senior
Improvement Management
Opportunities
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Influence Review Internal Understand
Positive Change Controls Risks

Primary Understand how future processes, policies,


Goals procedures, and other types of management
are producing maximum effectiveness and
Identify Inform Senior
efficiency.
Improvement Management
Opportunities
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Influence Review Internal Understand
Positive Change Controls Risks

Primary
Goals Establish the potential impact of
successes and failures in the specialized
Identify Inform Senior
functional areas of operation.
Improvement Management
Opportunities
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Influence Review Internal Understand
Positive Change Controls Risks

Primary The type of risks associated with business and

Goals operational risk range from business


interruption, employee omissions or errors, IT
Identify system failure, Inform
product failure, safety and
Senior
Improvementhealth issues, lossManagement
of key employees, fraud, loss
Opportunities
of suppliers, and litigation.
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As a result of understanding risks, auditors can
Influence Review Internal Understand
determine where to make improvements and how to
Positive Change Controls Risks
mitigate risks and improve opportunities. The broad

Primary categories of risk - and where improvements should


occur - are operational risk, financial risk,
Goals environmental risk, and reputational risk.

Identify Inform Senior


Improvement Management
Opportunities
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Influence Understand
The results Review
of the Internal
audit should appear in a
Positive Change Controls Risks
clear report that provides objective analysis,

Primary appraisals, recommendations, and pertinent

Goals comments concerning the activities reviewed.

Identify Inform Senior


Improvement Management
Opportunities
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Next Topic.

- Overview: Enterprise Risk Management (ERM)


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Do you have any questions?
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