• Tuesday July 7,2020

Administrative Audit

We explain to you what an administrative audit is, its principles and the types that exist. In addition, its different objectives and methodology.

An administrative audit evaluates the organization as a whole.
  1. What is an administrative audit?

Administrative audit is understood as a complete review of the organizational structure of a company or organization of any kind, as well as its control mechanisms, operation and human resources and materials. It is a procedure that evaluates the organization as a whole, comparing its performance with its objectives both globally and by unit, to get an idea about the effectiveness of its management model.

The term `` administrative auditor '' was first used in 1935, when James O. Mc McKinsey, a member of the American Economic Association, proposed the rationale for a review. n a company in all its aspects, in light of its present and probable future environment .

This concept would allow the subsequent emergence of ideas such as the self-audit proposed in 1955, and the development of this figure as an important mechanism in the field of competitiveness among organizations and in administrative theory.

An administrative auditor obeys the following principles:

  • Sense of evaluation. With this type of audit the potential or suitability of professionals or workers within the organization, as well as management dynamics, is not measured., of the administrative managers responsible for coordinating the company's forces internally.
  • Importance of verification . An effective audit not only bases its conclusions on the information obtained, but also offers scientific means to interpret it and to verify that it is a reliable evaluation.
  • Think of administrative terms . The focus of the auditors must always be on the administrative aspect of the company, and not on other areas subject to administrative management. It is an evaluation of processes and resources for the mission of the company.

See also: Financial Accounting.

  1. Types of administrative audit

There are two fundamental types of administrative audit:

  • Functional . It focuses on the performance and suitability of management positions and the dynamics proposed from them.
  • Analytical It focuses on the understanding of the processes themselves that are implemented within the structure of the company.
  1. Objectives of an administrative audit

An administrative audit increases the quality levels of a company.

Every administrative audit seeks to find the deficiencies or weaknesses of the different regions of a company, to correct or solve them. This means the following:

  • Optimize the management of resources by the company.
  • Evaluate the service (or product) provided by the company, in view of customer satisfaction.
  • Increase levels of quality and competitiveness through various mechanisms and management plans.
  • Identify administrative successes and replicate them in similar situations.
  • Analyze the functions of each division of the company in relation to the others.
  • Generate and propose new organizational schemes that solve problems at macro or micro business levels.
  1. Methodology of an administrative audit

Every administrative audit consists of four elementary steps:

  • Planning The parameters and guidelines that will serve to focus the audit review are established, that is, you must first define what to look for and what the specific search criteria will be. This goes through a reading of "symptoms" or apparent conflicts.
  • Instrumentation You choose between different models of data collection and measurement, depending on the business nature and the type of conclusions you want to reach.
  • Exam Planning is applied and data and statistics are collected or any other type of information that meets the established guidelines.
  • Report The closing of the audit results in a report in which the whole process is detailed and explained, the results are accounted for and, finally, the pertinent recommendations are made.

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