An administrative audit analyzes the management processes of an entity.
An audit is the analysis carried out on a situation, a state or an activity with the objective of establishing whether it meets the expected or required criteria or parameters. It may be indicated that it is a control or review that allows verification to be carried out.
Administrative , meanwhile, is a term that comes from the Latin word administratīvus . This adjective refers to that linked to administration : the act and result of administering (ordering, directing or governing) or the set of offices and dependencies dedicated to managing an institution or entity.
The administrative audit , in this way, is oriented to the study of the organization of an institution or company . Typically, we examine how management performs and how its policies are applied, reviewing their effects on the functioning of the corporation in question.
What is an administrative audit
The administrative audit investigates whether resources are being used correctly. It usually considers the performance of human capital , especially those responsible for making decisions .
What the administrative audit does is inspect the mode of organization and structure of the organization or company . This work makes it possible to detect flaws in the processes and weaknesses at a general level.
In a broad sense, it can be said that this type of audit helps determine whether managers are acting as they should and whether the strategy is appropriate from its conception and/or application.
At the conclusion of an administrative audit, the conclusions of the task are made known.
Its development step by step
The administrative audit is carried out through a series of successive steps. The starting point, prior to the development itself, is planning . At this point, you must define what the objectives are and how you will work to achieve them.
Then comes the turn to obtain and process the data . The information must be collected according to certain parameters and must be structured to facilitate its analysis.
Once the data is gathered, it is studied and evaluated . Finally, the administrative audit closes with the presentation of the conclusions .
Usefulness of administrative audit
The administrative audit can be carried out for various reasons . Sometimes, it is developed from a need of the company itself, while other times it arises from an external request.
A common purpose of these audits is to judge the role of managers. The owner of a firm can commission an administrative audit to find out if executives are carrying out their duties appropriately. The result of the analysis may lead to a modification of the authorities or the implementation of changes in certain areas.
The administrative audit, likewise, can be an external assignment when evaluating the possible purchase or absorption of a company. In this framework, the potential buyer wants to know details about the administration to evaluate the convenience of the operation .
It can be noted that the administrative audit is always useful to study, in a comprehensive and orderly manner, the level of efficiency of the procedures carried out in an entity in matters of administration or management.