Not all audits involve financial statements, regulations or organization policy. There are also audits focused on helping the organization become more efficient and effective.
Performance audits and operational reviews can improve the efficiency and effectiveness of operations. This allows you to identify and seize opportunities for increasing customer quality, improve service and even increase positive cash flow.
Learn more about the different types of audits.WHAT IS AN AUDIT & WHY DOES IT MATTER
What is a performance audit?
Performance auditing” is a term used whenever there is a need to distinguish between financial auditing and auditing that goes beyond financial transactions. Performance audits expand into operations, management and administrative performance of an organization. They add value and insight, and they provide information to improve performance, financial management, operational efficiency and cost reductions, as well as facilitate decision making and contribute to accountability.
In other words, performance auditing is a means of assisting management in improving its operations, not just identifying problems or weaknesses. For this type of audit to be effective, the auditor must be objective and not assess a one-size-fits-all approach when evaluating, for example, a new program or process against one that has been in existence for a long time.
Performance audits can lead to more effective, data-driven results for your organization.
Why would your organization need a performance audit?
An organization recently reached out with what was deemed a broken purchasing problem. Specifically they were experiencing:
Clearly there was a sense of frustration and confusion about how to resolve the situation. At this point, it did not matter what the resolution would be called; there was an urgent need to fix the problem. It is best to identify such problem areas as they happen using effective operating procedures that are identified through a performance or operational audit.
We recently talked through what a performance audit can do for your organization.
How can a performance audit benefit your organization?
A performance or operational audit may benefit your organization through:
Through periodic performance or operational auditing, you can identify the processes and procedures that are no longer working. Performance audits can help improve those areas that are working but could be more efficient.
The Impact of Performance Audits on Your Organization
Performance audits can help organizations and governments become more efficient, drive better performance and provide more value. Organizations who utilize a performance audit have a forward-looking approach to their operation.
We recently looked at how performance audits can drive results for governments.