Checklist for Review of Financial Audits Performed by the OIG_part4 pdf

©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 31
Specific Criteria
 Is each piece of equipment operating
at least 60 percent of capacity for
three months or more each year?
 Does layout facilitate the movement of
new materials to the production floor?
 Does layout facilitate the production
of finished goods?
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Specific Criteria
 Does layout facilitate the movement of
finished goods to distribution centers?
 Does the plant layout effectively use
existing equipment?
 Is the safety of employees endangered
by the plant layout?
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Sources of Criteria
 Historical performance
 Benchmarking
 Engineers standards
 Discussion and agreement
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Phases in Operational

Auditing
 Planning
 Evidence accumulation and evaluation
 Reporting and follow up
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Planning
 Staffing
 Understand internal control
 Background information
 Decide on appropriate evidence
 Scope of engagement
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Evidence Accumulation
and Evaluation
 Documentation
 Client inquiry
 Analytical procedures
 Observation
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Reporting and Follow Up
1. In operational audits, the report is
usually sent only to management
Two major differences in operational
and financial auditing reports:

2. Tailoring of each report is required
in operational audits
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Examples of Operational
Audit Findings
 Outside janitorial firm saves $160,000
 Use the right tool
 Computer programs save manual labor
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End of Chapter 26
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