Elements of a Strategic Audit
Discussion Question
Assess and elaborate on the following elements of a strategic audit.
- The advantages of a strategic audit
- The need that is filled by a strategic audit
- The advantage of a continuous strategic audit
- The source of the effectiveness of a strategic audit
- What a strategic audit provides
A strategic audit is a crucial aspect in driving organizational goals. This paper elaborates on different tenets of strategic audit.
The advantages of a strategic audit
Strategic audit prompts various benefits in the organization. Firstly, it enables small businesses to assess whether the internal processes drive the achievement of strategic goals. The audit results help the management to adjust operations and implement strategies to optimize progress to achieve those goals. A strategic audit also helps to highlight potential business risks, including a decrease in demand for products or services. Effective identification of possible risks helps prioritize them based on urgency and intensity to implement precaution procedures and avoid a critical condition (Karim et al., 2020). An audit helps the need to change resources or strategies. Some business goals may not match the available resources, and an audit becomes integral in assessing their performance to adjust accordingly.
The need filled by a strategic audit
The primary goal of every business is to make profits progressively at minimum costs. However, multiple factors affect businesses, and while some are unpredictable such as natural calamities, others could be controlled following effective implementation of relevant strategies (Karim et al., 2020). A strategic audit fills the need to identify possible risk factors that could spontaneously affect a business and implement viable solutions. It helps to maximally utilize the available resources for maximum outcomes at the lowest costs possible.
The advantage of a continuous strategic audit
A continuous strategic audit is essential, especially when implementing new procedures or standards. It posits multiple advantages, including immediate detection of frauds and errors. The auditor checks the accounts on a regular basis enabling to prevent the opportunity for complicated frauds. Early detection is vital for timely rectification (Kahyaoğlu, Sarikaya & Topal, 2020). Further, a continuous audit helps in the effective planning of audit work. The need for continuous audit helps the auditor spread work evenly across the year while enhancing efficiency in the work. The process also impacts an excellent moral effect on employees. Such is through prompting the employees to work efficiently and carefully while keeping their work complete and up to date. This strategy increases organizational performance and efficiency while minimizing possible risk opportunities and losses.
The source of the effectiveness of a strategic audit
Correct audit planning is essential in ensuring an effective strategic audit. In this regard, various components are responsible for effective audits, including researching the audit area. Understanding the business process or subject matter that needs auditing is paramount to effectively planning the audit (Vitolla & Raimo, 2018). Open communication during the planning process between the auditor and the auditee helps ease some concerns. In this case, it enables the auditee to gather the relevant information and set their documents correctly to minimize complications, hence increasing the procedure’s effectiveness (Vitolla & Raimo, 2018). Further, conducting process-walk throughs with the company leaders helps identify risks and hindrances to achieving organizational goals and objectives. Overly, the effectiveness of an audit direly depends on prior research of the audit area to familiarize with the resources and how effectively the company utilizes them for maximum output.
What a strategic audit provides
Strategic audits provide a lens through which the management understands the weakness and strengths of the current strategies in achieving the goals. According to Karim et al. (2020), an audit helps the management align the resources with the prevailing market trends and business environment. In this regard, risks are quickly identified, and precautionary measures are implemented to enhance performance. Such is through the opportunity to evaluate the current strategy and compare this with the company’s goals and aspirations.
Generally, strategic audit poises as a tool for organizational success. The paper discussed the value of strategic audit through different dimensions.
