Operational audit and its role in the development of the country's economy

Introduction

Management is defined as the knowledge of effective and efficient use of resources to achieve the organization's goals, and these resources usually include capital, labor, and resources available to the organization. A manager must plan, organize and control the operations of the organization in order to achieve maximum benefits. In today's world, responsible and leading managers always try to gain the necessary confidence from careful monitoring and objective evaluation of their duties in order to remain strong and dominant in the face of the issues in front of them and to do their work correctly and on time. Therefore, they should never hesitate to use the services of experts and specialists outside their organization to determine problems and provide their solutions in order to achieve more and more success by using these services.

In recent years, the focus and scope of many audits in the public and private sectors have undergone transformations, and since financial statements alone do not answer the information needs of management, managers in the private and public sectors seek to obtain more information in order to evaluate and judge in They are about the quality of operations and operational improvements. As a result of the creation of such fields, the need for performance audit techniques to evaluate the effectiveness, efficiency and economic efficiency of operations has increased significantly.

Examining the reasons for the increasing demand for performance audit services shows that the following two issues have provided a suitable platform for performing this audit:

- Guiding managers to pay more attention to economic efficiency, efficiency and effectiveness in economic units;

- Improving the experiences of independent auditors in the field of identifying and finding the facts in financial auditing and management consulting and providing the necessary guidelines to managers.

The economic system of a country depends to a significant extent on management decisions in economic units. It is obvious that these decisions play a decisive role in the amount of economic income and the effectiveness of the determined activities and the optimal use of the production and service facilities of the country's for-profit and non-profit institutions. Therefore, basically, shareholders or their representatives always want to know whether the executive directors have acted correctly in their decisions or not. And have they been able to make the most of the available facilities or not? Has there been an increase in efficiency and economic efficiency in the institutions?

Today, in the economic environment that has multiple systems and various dimensions, organizational management has an increasing emphasis on evaluating economic efficiency, efficiency and effectiveness of organizational operations. Performance audit is used as a tool for this evaluation.

In competitive environments, it is necessary for managers to use the performance evaluation process to correctly guide things in the direction of work progress and in the direction of the organization's desired goals and strategies in a conscious manner. Considering the rapid changes and developments and increasing the competitive power and capabilities of companies and organizations in today's world, the degree of desirability of the performance of individual work components of the organization and its total can be very important as a measure of the success of an organization for managers, and by using them They can measure and evaluate the existing status of the organization's strategic plans and review the performance of its work components and take action to promote and improve their effectiveness and efficiency. The expansion of competition has caused senior management in many modern organizations to focus on gaining a suitable position in the market and maintaining it. Managers have realized that many organizational systems that are expected to be useful for advancing operations move in the opposite direction of the organization's goals and cause delays.

Performance audit is a useful tool to improve these systems and guide the organization towards its goals. In our country, the management of most of the economic resources is the responsibility of the government, and the quality of its management has fundamental effects on the fate of the nation. Public sector managers must be accountable to the people and their representatives and provide the tools for this accountability based on reliable information. The nature of the public sector requires that in this sector, performance audit is required in addition to handling financial statements and giving opinions within the framework of the principles and rules of financial auditing. Hence, it is necessary for auditors to assess the quality of management decisions while using the services of experts in various fields and to present their conclusions and corrective suggestions to improve management as much as possible.

Considering the importance of improving management in organizations, especially in the public sector, it is necessary for managers to pay attention to the establishment of comprehensive management control systems and review it in terms of continuous evaluation of efficiency, economy and effectiveness. In this regard, management auditors, similar to financial auditors, can play an important and valuable role in improving and strengthening these systems. As a result, the desired accountability of the public sector is created when the planning and performance of the organs are dealt with based on the clear statement of the expected goals and results, so the performance audit is a clear statement of compliance with economic efficiency, efficiency and effectiveness in the performance of all large and small organizations. Is.

Performance audit:

The term performance auditing (PERFORMANCE AUDITING) or operational auditing is usually used to make a difference between auditing financial statements to express a professional opinion on it and auditing that deals with selected aspects of an organization outside the scope of accounts.

The purpose of this audit was to determine opportunities for greater efficiency and economic efficiency and to improve the effectiveness of operations, which are related to the goals of the organization.

It is an important question especially for group companies whose one or more members are publicly owned. I have experienced this paradox in the past, as an accountant many years ago back in Turkey. I was working as an accountant in a well known medium sized bank. Our parent was a larger well known bank. Both were privately owned and shares traded in the stock exchange. Our parent; by the force of board of directors in which the parent had the final say; held our one million dollars in their accounts with zero interest for a year. Since we were open to public this was a manipulation of the parent on its subsidiary. Shareholders lost interest revenue. This issue was captured by our auditors and reflected on their audit report.

I think the following paper will help you out in this regard:

A Critical Analysis of the Development of the Roles and Responsibilities of the UK Audit Committee for Effective and Good Governance

EO Akpoghelie - Global Journal of Arts, Humanities and Social Sciences, 2022 - tudr.org

The role of audit in ensuring suitable accountability of a company's fund is crucial. An audit is an independent examination of an organization's financial records and systems, with the aim of expressing an opinion on their accuracy, reliability and compliance with applicable laws and regulations.

The following are some ways in which an audit promotes suitable accountability of a company's funds:

1. Ensures accuracy: An audit helps to ensure the accuracy of a company's financial statements and enables stakeholders to rely on the financial information provided. This promotes transparency and accountability in the use of the company's funds.

2. Detects errors and fraud: An audit can detect errors, inconsistencies and fraudulent activities in a company's financial records. This helps to ensure that the company's funds are not being misused or misappropriated, which helps to promote accountability.

3. Enhances governance: An audit provides an independent assessment of the company's internal control systems and helps to identify weaknesses that could lead to fraud or mismanagement of funds. This enhances the governance of a company and promotes accountability.

4. Ensures compliance: An audit ensures that a company is complying with applicable laws and regulations that govern the use of its funds. This promotes accountability and helps to protect the interests of stakeholders.

5. Enhances investor confidence: An audit can enhance investor confidence in the company's financial reporting system by providing assurance that the company's financial statements are reliable and accurate. This promotes accountability and encourages investment in the company.

Overall, the audit process plays a crucial role in promoting accountability of a company's funds, ensuring that the company is using its resources in a responsible and transparent manner.

Auditing plays a crucial role in ensuring the suitable accountability of a company's funds. The primary purpose of financial auditing is to provide an independent and objective assessment of a company's financial statements and related financial information. Here's how auditing contributes to accountability in a company's use of funds:

Auditors examine the financial statements, including the balance sheet, income statement, and cash flow statement, to verify the accuracy and completeness of financial information. This ensures that the company's financial reports provide a true and fair view of its financial position.

Auditors are responsible for identifying any fraudulent activities or errors in the financial records. This is crucial for maintaining the integrity of financial data and ensuring that funds are used appropriately.

One of the basic audit tasks is to ensure the accuracy of recording, tabulating, and downloading information related to the financial events that take place on the Fund’s account by examining and matching the data in the actual records, documents, evidence, and proofs available to the institution that have been relied upon by the accountants and those in charge of the Fund’s work, as well as verifying The correct application of international or local standards used in completing accounting tasks and financial operations.

audit is an independent examination of an organization's financial records and systems, with the aim of expressing an opinion on their accuracy, reliability and compliance with applicable laws and regulations.

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