Operational Audit is systematic process of evaluating an organization’s operational efficiency and effectiveness. On completion of Operational Auditing, the results of the evaluation and the recommendations for improvements will be reported to the management for action. It means that the internal auditor goes beyond financials controls into operating areas. It is focused to strengthen Organization’s operations and control mechanism for day to day operations. Operational Audit will help to identify points of non-conformity in procedure implementation. It will help the management to take corrective actions.
The prime objectives of operational audit include the following
Research: During the pre-audit information about the organization and its processes is collected. With this information, the auditors place products, processes and activities of your organization in the proper perspective (business model).
Fieldwork: During the field investigation, the reference model is compared with the actual situation. This phase of the audit process consists of all activities necessary for the collection of data to findings and recommendations to be taken.
Reporting: The main component of the audit is the audit report. This is because the results, findings and recommendations of previous steps are writte down in the report. Following the reporting will be a management plan drawn up (game plan).
Evaluation: After completion of the audit one shall examine to what extent it has met the expectations of the sponsor and those of the management of the subsidiary. The aim is to learn from the audits and, where necessary, improvements in the design or conduct of the investigation.
Follow-up: Each audit will have a follow-up. This is to determine whether established plans were actually implemented and whether these have led to improved management in the organization. Depending on the game plan the follow up will take place one or two years after implementation of the operational audit. The follow up is not a full audit, but a survey of how the game plan is realized.