Objectives and Phases of Operational Audits
Objectives and Phases of Operational Audits
PHASES OF
OPERATIONAL AUDITS
Defining the objectives of any engagement is an essential step
to put it on the right footing for success. Not having clearly
defined objectives will result in wasted time and money,
frustration for all involved, and damage the reputation of the
internal audit function.
KEY OBJECTIVES OF OPERATIONAL AUDITS
The objectives of the review will depend on several factors. First of all, we must determine whose
objectives the engagement is intending to address. Internal audit should be careful not to define the
objectives unilaterally.
• New rules. Rules can be established internally (e.g., policies and procedures) or
externally (e.g., new or updated laws and regulations), or a combination (e.g., a
contract signed by the organization and one or more external parties).
• Compliance issues. These can be the result of internal quality control initiatives
that identify anomalies. In the case of regulators and inspector reviews that
identify instances of noncompliance at other organizations, the internal audit
department may investigate conditions at their organization to determine if a
similar problem exists at home, help to monitor the situation, and verify that
follow-through on corrective actions take place in anticipation of future additional
compliance reviews by external parties
KEY OBJECTIVES OF OPERATIONAL AUDITS
The objectives of the review will depend on several factors. First of all, we must determine whose
objectives the engagement is intending to address. Internal audit should be careful not to define the
objectives unilaterally.
• Risk Assessment;
• Scoping;
• Budgeting;
• Defining the population of interest; and
• Announcing the audit
PHASE 2: FIELDWORK
The phase when most of the testing is performed.
It includes:
• Interviewing
• Documenting
• Applying testing methodologies
• Managing Fieldwork
• Providing status updates
FIELDWORK
TYPES OF AUDIT EVIDENCE OBTAINED FROM AUDIT PROCEDURES
• Testimonial.
• Observation.
• Document Inspection.
• Recalculation.
• Reperformance.
• Professional Skepticism.
• Workpapers.
• Flowcharts.
• Internal Control Questionnaire.
PHASE 3: REPORTING
It is the communication of results.
PHASE 4: FOLLOW-UP