Operational auditing’s goals

The following are some of the goals of operational auditing:

• Review the company’s policies, practices, and action plans.
• Attain increased profitability.
• Ascertain the effectiveness of the current procedures by putting control measures in place.
• Measurement of performance based on labour productivity.
• Promote socially responsible business practices.

Role and Responsibilities

The CEO and/or General Manager are primarily in charge of overseeing the day-to-day business activities. However, the Process Owner or Line Manager in charge of that operation or process will be accountable for each specific function or process covered by the Operational Audit.

Procedures for Operational Audit

• Knowing the company’s operational hierarchy and organizational structure.
• Having a thorough understanding of the current Policies, Procedures, and manuals for each function or process.
• Application of the currently established defined policies and procedures is walked through or field checked.
• Examining the holes or weaknesses in the current procedures.
• Recommendations to the management for closing the loopholes and establishing internal controls (if none already exist).
• To ensure that activities proceed without interruption by using the provided solutions and advice.
• To carry out a follow-up audit to evaluate the operation’s operational effectiveness.

Operational auditing tasks

• The degree to which senior management has succeeded in ensuring that all organisational operations are focused on boosting profits.
• Methods for reducing waste or loss by revealing the gaps or potential trouble spots between different levels of staff as well as between line management and the senior level.
• Deviations from the established goals and policies.
• To overcome undesirable outcomes and conditions, corrective action is required.
• Evaluation of one’s performance.
• Cost-cutting initiative.
• Physical operations issues.
• Examine the operating departments’ goals, including how production is carried out and how results are evaluated.
• Examine scrap, salvage, regular, and unusual wastages.
• Planning and managing the production process.

Discussion and Reporting

For busy executives to read, understand, and act on the findings of our work, the reporting should be straightforward and concise. The operational audit report details the findings, auditor recommendations for the reported findings, management measures to be performed, process owner responsibilities, and the goal date for the observation’s closure.

This report needs to be thoroughly addressed with management and the process owner to assist managers in assessing and analyzing how the business is now run and locating potential areas for improvement.