Operational Auditing is a way of objectively, constructively, systematically and professionally evaluating the activities related to the management process of an organization.
The world business economic context is currently permeated by distinctive factors such as the pressure exerted by competitiveness and the new rules of the game imposed by globalization; To this must be added the speed of real-time communications and the upward support of technology. For this purpose, modern companies must take into account their vision and mission , the implementation of strategic planning as a form of control, the application of objectives and goals and strategies, as well as maintaining an orientation towards competitiveness, globalization, new business models, information technology and the use of modern management tools such as CRM (Customer Relationship Management ).
The current circumstances in which many companies operate show the absence of effective corporate governance, the concentration of all authority in the General Manager or CEO (Chief Executive Officer) and the current regulations allow that all responsibility is endorsed, without take into account other subordinates who are often the ones who make and break in the business organization Likewise, the direct relationship between the managers and those in charge of finance has been observed, preserving the judgment of the Shareholders' Meeting, the Directors, the internal and external Audit and other specialized organs of the company.
Faced with this business disorder, the Operational Audit emerges, which is an objective, constructive, systematic and professional evaluation of the activities related to the management process of an organization ; The purpose of this specialized branch of accounting is to achieve a high degree of efficiency, effectiveness, effectiveness, economy, equity, excellence and valuation within the company, also considering the new trends oriented to environmentalism that is experienced today. The Operational Audit discovers the day-to-day reality, determining how resources are used; as well as the adequacy and effectiveness of the information and control systems, so that it complies with the policies established to achieve the objectives established in the company.
This accounting specialization is oriented to two types of information, the first is the Operational Auditors in UAE, basically related to the objectives of effectiveness, efficiency and economy; while the second is related to the evaluations of the Internal Control System, whose purpose is to evaluate the design and operation of the Systems established by the company.
For a correct application of the Operational Audit, some important aspects must be taken into account, among them:
Evaluation of the planning of the company: It allows to specify the administrative and operational deficiencies in the planning within the company at all levels. It includes the analysis of the vision, mission, objectives or goals, plans, strategies, programs, policies, procedures and norms.
Accounting and finance assessment: Capital resources are essential for management to meet its goals and objectives. So it is necessary to evaluate the accounting records, periodic financial statements, income statement, etc.
Evaluation of the marketing function: Using questionnaires, the overview of marketing, sales, market research, advertising and physical distribution can be evaluated.
Research and Development and Engineering Evaluation: These areas are also analyzed due to their importance for the growth of a company. A productive effort in research and development is a source of new products. The Engineering role is all about establishing the right conditions for manufacturing and testing.
Evaluation of the production function: This must be planned, programmed, directed and controlled to produce the desired final merchandise, so that it reaches the customer in the scheduled period. Understand the overview of production, inventory, and purchasing.
Evaluation of the personnel function: The difficulty of evaluating the human factor makes this evaluation difficult. They are evaluated for this function: the overview of the personnel, the planning of the workforce and the industrial relations.
Evaluation of the work environment and the human element: Constant changes in the work environment affect the performance of an organization; therefore the adequacy of the work structure must be evaluated with respect to the current moment.
Information system evaluation: The degree of managerial control over the information system must be determined. Controls to the computer department, inputs, programs and output controls, and interactive and security controls are evaluated.
In view of these, the Operational Audit involves the period under review, verifying the information regarding institutional performance and reviewing and preparing reports on the administration of resources . This analysis also involves verifying the key activities and processes, evaluating the information and control systems, verifying the use of public or private resources in accordance with the principles of efficiency, effectiveness, economy, efficacy, equity and excellence; as well as to verify the fulfillment of goals and objectives and in sum to evaluate the management.
For its part, the objectives pursued by the Operational Audit are very clear, the most important is to provide all types of organizations with the information necessary to use this powerful tool in a manner consistent with their needs and installed capacity, in order to evaluate behavior and derive the measures required to improve their performance. There are other well-determined objectives related to establishing the degree to which the company and its workers have adequately fulfilled the duties and attributions assigned to them, determining the degree to which the body and its officials control and evaluate the quality of both the services that lends as in the acquired goods; verify that the audited entity complies with standards and other legal and technical provisions that are applicable to it, as well as with principles of economy, efficiency, effectiveness, effectiveness, equity, excellence and valuation of environmental costs, according to each case, and formulate appropriate recommendations for each of the identified findings.
It is also important to strengthen the security system of all the organization's resources ; promote legality, economy, efficiency, effectiveness, equity and excellence in organizations, stimulating the adherence of personnel to the fulfillment of the entity's objectives and policies. The latter will result in improving the entity's productivity, competitiveness and quality levels , consolidating and reinforcing quality and productivity control policies with a long-term vision.
The importance of the operational audit is based on the fact that it is possible to know the problems that hinder operational development and hinder the growth of the company. It is important for this discipline to assess the importance of problems, find their causes and propose appropriate solutions and implement them. The analysis and evaluation of both internal and external factors must be done in a systematic and comprehensive manner, covering the entire company.
In short, the Operational Audit serves to check the capacity of the administration at all levels . It is a way to determine the key points where there is a potential danger and on the other hand, to locate the opportunities for improvement, possibility of reducing costs, opportunity to eliminate waste and unnecessary loss of time, with the consequent improvement of processes; as well as evaluating the effectiveness of Internal Audit and control system reviews in UAE.
