BHMJ provides the service of operational audit.
What is the operational auditing process?
Plan the audit process
The auditor meets with relevant managers to discuss and plan their audit method. During this discussion, the auditor gains an understanding of the business and any potential concerns. They can then identify areas that may require process improvements, providing challenges for them to focus on during the audit. Through this conversation, the auditor also establishes the scope and timeline of the audit.
Next, they can begin establishing the audit’s goals and strategies. These objectives vary but should aim to support the organization’s needs and overall objectives. They may focus on a specific area of the company and its related processes. For example, a company may perform an operational audit on its hiring practices. The auditor and managers must establish objectives for those processes to meet, such as increasing the number of employees hired over a set period. Then the auditor uses those objectives to assess the company’s current procedures and find improvements.
Conduct the audit
Now the auditor examines the business areas within the scope of their audit program. The auditor needs to assess the existing processes and procedures to determine whether they meet the goals set earlier in the audit process. They have conversations with managers and employees to discuss whether the processes meet expectations. The auditor also may observe employees as they conduct those procedures and examine every step.
Once the auditor understands and reviews the processes or procedures, they can develop tests to evaluate them. Through those tests, the auditor may find specific factors that need improvement and generate and experiment with solutions that help fulfill their objectives. An ideal process works without issues and enables the company to conduct the task in a cost- and time-efficient manner.
Report audit findings
The auditor develops a report on their findings and includes any recommendations for improvements. Depending on those recommendations, the auditor may also draft an implementation plan to help the company make the necessary changes. They discuss these recommendations with relevant managers, ensuring that the management team understands the findings and solutions. The management may agree to follow all the suggestions or discuss why some changes may not be feasible.
Perform a follow-up
After completing an audit, the auditor sets up a follow-up meeting with the relevant management team and staff. Commonly, they hold the follow-up about six months after the audit. During the follow-up, they discuss the changes made to the processes and assess their results. They measure these results to the objectives set forth by the audit and determine whether they meet those goals or are making some progress towards them.
Types of operational audits
An operational audit examines the business processes and procedures within a company. This type of audit may overlap with other types of audits, such as:
- Department audits: Different departments within a company use different processes and procedures related to their goals or responsibilities. An audit can assess those processes and find ways to improve them. It can also examine the department’s available resources and how efficiently they use them when conducting processes. For example, an operational audit could look into specific departments such as human resources, marketing or IT.
- Investigative audits: If a company discovers or suspects an error or security breach has occurred, they may conduct an investigative audit to determine its cause. As part of this audit, they may assess the processes performed by an employee or department. The auditor may make suggestions to improve those processes or related procedures to ensure the issue does not occur in the future.
- Compliance audits: This type of audit evaluates whether a company follows relevant external laws, along with internal policies. The auditor will assess current processes and procedures to ensure they meet any necessary standards or regulations related to the organization’s industry. A company may also have rules for conduct that all employees much follow, so the audit may inspect compliance with processes for hiring and firing employees, for example.
- Follow-up audits: After an operational audit, the company will implement any necessary changes. They may then set a determined time to conduct a follow-up audit to evaluate the changes’ effectiveness.