An audit helps assess the strategies that are put in place by any organization. Strategic auditing however helps those in small businesses evaluate their internal processes to see if they are driving the business to achieve its strategic goals. Audits assess whether the business is abiding by laws and regulations or with the policies and the procedures that are set internally. The results from the audit allow the management to adjust its operations such they maximize the development towards achieving the strategic goals.
Advantages of a strategic audit
It allows businesses to have a new perspective on how the business is doing. For instance, if company A has franchises in different parts of the country, it allows management to see how well or not the business is doing. It allows the business to formulate goals and objectives that are specific, this way, it looks into the various functions in the business and how they all contribute towards achieving the desired strategic goal (Shiri, 2012). It allows the business to understand and evaluate its position compared to the assets, goals, and configuration in the businesses. It allows the business to stay committed to achieving its goals through regular evaluation of the state of the business.
Needs fulfilled by Strategic Auditing
It allows businesses to formulate strategic plans, both long-term and short-term, this way auditors have a baseline for the business. For instance, the business could be providing a niche product and its long-term goal could be to ensure that they dominate the market (Carson, 2012). The short term goals would be to ensure that they customize their products to get to more customers or to improve the quality of customer service. The business will need to implement the plan by looking into the different departments in the business and assessing whether they contribute to achieving the plan. For instance, the sales team should have very open-minded people who are always willing to learn and with the right training, they contribute to the success of the business. It allows consumers to know what products and services a business is providing through aggressive marketing and advertisement. Having an audit report also helps the business assess whether the business is achieving its goals between audits. Advantage of continuous strategic auditing
It allows the business to automate analysis of its financial reports, thus minimizing waste or time and even resources (Vasarhelyi, 2012). It reduced the time spent auditing in a cycle thus diverting attention to the more demanding task eventually increasing profits. It allows the business to generate customized reports that re useful to external clients and especially investors. Besides, it allows auditors to keep track of all the transactions and accounts within the company.
The source of the effectiveness of strategic audit
Automation of audits helps save more time and maximize profits. It allows the formulation of goals and objectives that are workable and realistic within a strategic period.
What a strategic audit provides
It provides insight into whether the company is making maximum use of its resources. It allows the company to review whether it is meeting its set objectives.
In conclusion, strategic auditing is an important aspect of an organization is achieving its long and short term plans in a set period as well as attract investors. The continuous process allows auditors to update their strategies to achieve their goals.
Carson, E., & Dowling, C. (2012). The competitive advantage of audit support systems: The relationship between extent of structure and audit pricing. Journal of Information Systems, 26(1), 35-49.
Shiri, S. (2012). Strategic role of hr audit in organizational effectiveness. Journal of management
and public policy, 3(2), 39-45.
Vasarhelyi, M. A., Alles, M., Kuenkaikaew, S., & Littley, J. (2012). The acceptance and adoption of continuous auditing by internal auditors: A micro analysis. International Journal of Accounting Information Systems, 13(3), 267-281.
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