In the video, I learned the following:
First, I know a bit auditing but I do not know what operational auditing is. Then, I learned that
operational auditing was an assurance and consulting activity which aims to add value and improve the
operations of the company. Operational auditing is a vital aspect of auditing since it involves people,
processes, and systems. However, it also improves its economy including its efficiency and effectiveness.
Next, I learned about the operations strategy, which is a plan for the design and management of
operations and functions. It is developed after the business strategy. The operations strategy focuses on
specific competitive priorities in order to achieve the business strategies developed beforehand.
Competitive priorities such as cost, quality, time, and flexibility are focused on in order to meet the
plans of the business.
Lastly, I learned about the reasons as to why operational auditing is essential to a business. Not only
does it give value in terms of monetary amount in the operations of the business, but it also provides
reliability of the outcome of the operations as well as economy, effectiveness, and efficiency (3E) in the
operations of the business. Moreover, it fixes the standards of the company if it has issues and concerns
to be addressed and also acts as the benchmark of the company in terms of operations and standard or
policy setting.
In this discussion video, the following are the key points that I’ve learned.
(1) I learned about the general definition of operational auditing and its two major goals. I learned that
operational auditing is an independent, objective assurance and consultancy activity, the goals of which
are to add value and the improvement of an organization’s operations and/or performance. It involves
total independence in order for practitioners to provide an objective service that relies on benchmarks
and other standards that are professionally-made; thus, reliability and fairness is present.
(2) I also learned about the different objectives of operational audit and its acronym for better recall
which is DEMING, the source of which comes from the proponent of studies on total quality
management, William Deming. This includes a detailed understanding of existing processes to suggest
improvement, elimination of wast and duplication of work, merging of operations or processes to turn
around time, improvement or increase in quality, volume, and revenue, new methods for better results,
and finally, govern man, machine, methods and money. These objectives clearly are geared towards the
various necessary functions involved in the operations of organizations.
(3) I learned that there are two approaches that practitioners have in operational auditing and these are
the active and passive approaches. The former is geared towards preventive activities like wasteful
activities and to promote compliance with internal control procedures. The latter is geared towards
detection where identification of the problems of the operations is a major activity and end results of
which aim to find and provide solutions for such.