Types Of Audit

There are different types of audits. The most common ones are listed in this article.

Performance Audits. This type of audit refers to an independent evaluation or examination of a function, program, operation or the management systems and procedures of a non-profit or government entity. It aims to assess whether the entity is achieving efficiency, economy or effectiveness in the use of available resources. Security, safety, environmental concerns, and information systems performance are becoming more of the subject of audits. Today, there are audit professionals who specialise in information systems audits and security audits. Because of the existence of non-profits and government agencies, there have been a rising need for performance audits that examine the success in satisfying the objectives of missions.

Quality Audits. This type of audit is done to verify the conformance of a company to the standards by a review of objective or impartial evidence. Systems of quality audits may validate or verify the effectiveness and efficiency of a quality management system. Which is a portion of certifications like ISO 9001. A quality audit is necessary in verifying the existence of objective evidence that shows conformance to required processes. They are also important in assessing how successfully have the processes been implemented and judge the effectiveness of achieving defined target levels. These type of audit are necessary for providing evidence about the reduction and elimination of problem areas. They are considered as hands-on management tools that help achieve continuous improvement in an organisation.

For the organisation’s benefit, quality audits should not only report non-conformance and corrective actions. They should also highlight good practices and supply evidence of conformance. In this manner, other departments can share information and alter working practices to enhance continuous improvement.

Project Audits. This type of audit provides a chance to uncover concerns, issues, and challenges encountered during the project lifecycle. They are usually conducted midway through the project. It gives the project sponsor, manager and team a view of what has gone well and what should be improved to complete the project successfully. If the audit is done at the closing of a project, it can be used to develop success criteria for future projects through the provision of a forensic review. The forensic review identifies which project elements were successfully managed and which ones have presented challenges. The review will help the organisation identify what it needs to do to avoid repeating mistakes on future projects.

There are two types of project audits:

• • The first one is regular health check audit which aim to understand the current state of a project to help increase the project’s success.
  • The second one is regulatory audits which aims to verify that a project is compliant with the standards and regulations. Regulatory audits must be objective, accurate and independent as it tries to provide oversight and assurance to an organisation.

Other forms of project audits include:

• • Formal audit. This type of audit applies to a project in trouble, or when a sponsor agrees that an audit is needed, when sensitivities are high and when there is a need to prove conclusions through sustainable evidence.
  • Informal audit. This applies when there is a new project manager and when there are no indications that the project is in trouble but there is a need to report about where the project is supposed to be. Same criteria apply as formal audits but there is no need for in-depth or formal reports.

Energy Audits. This type of audit inspects, survey and analyses the energy flow for energy conservation in a building, a system or process. It tries to reduce the amount of energy input into the system without negatively affecting outputs.

Operations Audit. This type of audit examines or evaluates the operations of the business of a client. Auditors thoroughly examine the effectiveness, efficiency, and economy of the business’s operations that management and its objectives are trying to achieve. It goes beyond internal controls. This type of audit covers matters that may be commercially unsound. It examines effectiveness or doing the right things by not wasting resources, efficiency or performing work in little time possible and economy or balancing between benefits and the cost of running the operations. To complete an operational audit, a control self-assessment tool is commonly used.

Forensic Audits. This type of audit is also known as forensic accountancy or forensic accounting. It is an investigative audit where accountants who specialise in accounting and investigation seek to uncover frauds, negligence, and missing money.

Kingston Knight Audit are the Auditor Melbourne experts to contact when dealing with your trust account audit, SMSF Audit, financial statement audit,  and internal audit requirements. Contact us today, Kingston & Knight Audit offers a free telephone consultation to establish how we can best help you achieve the assurance and compliance you require.

Call our Melbourne team today on 03 9088 2242, or email us via  audit@kingstonknightaudit.com.au.