Auditing

Examples of Auditing in the following topics:

• Project Management Audits

  • Like a project management audit, a quality audit is an external verification that a project is compliant with regulations and standard.
  • A system of quality audits verifies the effectiveness of a quality management system.
  • Audits in project management also include regulatory audits to provide external verification that a project is compliant with regulations and standards.
  • Best practices of auditing dictate that a regulatory audit must be accurate, objective, and independent while providing oversight and assurance to the organization.
  • Project managers benefit from periodic auditing in two broad ways.

• Social Responsibility Audits

  • Social responsibility audits are a process of evaluating a corporation's social responsibility performance.
  • As with financial audits, social responsibility audits involve accounting processes.
  • The lack of clearly defined standards makes social audits different from financial audits, for which there are generally accepted standards.
  • One metric that might be tested in a social responsibility audit is worker conditions in the company's plants.
  • Apply the general concept of auditing to the larger framework of social responsibility within organizations

• Types of environmental audits

  • Acquisition audit.
  • Compliance audit.
  • Due diligence audit.
  • Waste audit.
  • Water audit.

• Getting started

  • Communicate the goals of the audit to everyone beforehand.
  • Identify the parameters of the audit.
  • How will the audit's findings be recorded?
  • Determine these issues before an audit begins.
  • Audits should be conducted on a regular basis.

• Environmental audits

  • Just as the process of mapping out a work system isn't called process-mapping by waste-minimization practitioners, when setting out to gather and/or check sustainability facts and figures, many practitioners don't refer to what they're doing as an audit.
  • The word ‘audit', however, is appropriate even though most accounting systems fall far short of what an understanding of sustainability requires (e.g. clean air has no financial value, but try living without it).
  • Professional auditors go a step further, using the term environmental audit to describe the gathering, checking and analysis of material use – as well as the measuring of waste and emission levels.
  • Make no mistake, despite the fact that the word ‘environment' makes up the name, environmental audits are similar to financial audits in that they are very effective in reducing waste.
  • Comparing audit results to industry standards (such as ISO 14001 standards and guidelines), and

• Environmental audits don't hurt

  • According to companies that have undergone an environmental audit, the process is relatively painless.
  • For example, the Glasgow Housing Association in Scotland (the largest social landlord in the UK) had a first-time environmental audit performed at its headquarters by the British Safety Council, which identified over $51,000 in savings.
  • (www.britsafe.org/download/audits-advisories/5-star-environmental-brochure.pdf)
  • Seen this way, an environmental audit can lead to cost savings that morethan pay for the price of the audit.
  • Genzyme Diagnostics, for example, a biotechnology company in the UK, had an environmental audit performed thatuncovered over $80,000 in potential annual savings resulting from waste elimination suggestions, reuse and recycling tips, and lighting and water-use reduction measures.

• Making Agencies Accountable

  • The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress.
  • The GAO's auditors conduct not only financial audits, but also engage in a wide assortment of performance audits.
  • These standards, often referred to as Generally Accepted Government Auditing Standards (GAGAS), must be followed by auditors and audit organizations when required by law, regulation, agreement, contract, or policy.
  • These standards pertain to auditors' professional qualifications, the quality of audit effort, and the characteristics of professional and meaningful audit reports.
  • The GAO is the audit, evaluation, and investigative arm of the United States Congress.

• Quality Inspections and Standards

  • Companies ensure the quality of products and services by adhering to ISO standards and performing quality audits to ensure compliance.
  • Quality audits and adherence to ISO standards are not just for private corporations; the US Food and Drug Administration requires that medical devices undergo quality auditing, and several countries require quality audits of their educational systems.
  • A quality audit is the process of systematic examination of a quality system carried out by an internal or external quality auditor or audit team.
  • Quality audits can be an integral part of compliance or regulatory requirements.
  • Audits can also be used for safety purposes.

• Valuing the Target and Setting the Price

  • Compatibility audit: This deals with the strategic components of the transaction and, in particular, the need to add shareholder value.
  • Reconciliation audit: This links/consolidates other audit areas together via a formal valuation in order to test whether shareholder value will be added.

• Additional Items: Auditor and Management Reports

  • When an audit is performed on a company, the auditor issues a formal opinion in the form of an auditor report.
  • If a company has an audit performed, whether by an internal auditor or an outside auditor, the auditor issues a formal opinion.
  • Please note that the Securities and Exchange Commission requires an audit by an outside auditor.
  • Limitation of scope occurs when the auditor could not audit one or more areas of the financial statements, and although they could not be verified, the rest of the financial statements were audited and they conform to GAAP.
  • Auditor reports stem from an internal or external audit of the company's financial statements.