Podcast
Questions and Answers
What is the main focus of the book 'Why CISOs Fail'?
What is the main focus of the book 'Why CISOs Fail'?
Which edition of 'Operational Auditing' was published in 2022?
Which edition of 'Operational Auditing' was published in 2022?
Who are the authors of the 'Cybersecurity Workforce Framework (2.0)'?
Who are the authors of the 'Cybersecurity Workforce Framework (2.0)'?
Which company published the first edition of 'Operational Auditing'?
Which company published the first edition of 'Operational Auditing'?
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What is the primary concern expressed by the authors regarding the copyright material in the publications?
What is the primary concern expressed by the authors regarding the copyright material in the publications?
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What is stated about the publication year of 'Why CISOs Fail'?
What is stated about the publication year of 'Why CISOs Fail'?
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Where is the CRC Press based, as noted in the publication details?
Where is the CRC Press based, as noted in the publication details?
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What is a notable aspect of the books published by CRC Press according to the information provided?
What is a notable aspect of the books published by CRC Press according to the information provided?
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What is a primary implication of sustainability reporting according to survey respondents?
What is a primary implication of sustainability reporting according to survey respondents?
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What is the purpose of Corporate Social Responsibility (CSR) as described in the content?
What is the purpose of Corporate Social Responsibility (CSR) as described in the content?
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Which of the following is NOT one of the elements of the triple bottom line?
Which of the following is NOT one of the elements of the triple bottom line?
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What is one of the challenges related to sustainability reporting as mentioned in the content?
What is one of the challenges related to sustainability reporting as mentioned in the content?
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How is the role of auditors evolving according to the content?
How is the role of auditors evolving according to the content?
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How do internal auditors view their role in terms of adding value?
How do internal auditors view their role in terms of adding value?
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What misconception does the text address regarding internal auditors?
What misconception does the text address regarding internal auditors?
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In what way do auditors see their role differently, beyond verification and checking?
In what way do auditors see their role differently, beyond verification and checking?
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What is a significant consequence of poorly supervised, trained, and evaluated employees?
What is a significant consequence of poorly supervised, trained, and evaluated employees?
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Which issue is most likely to arise from inaccurate understanding of business needs in IT systems?
Which issue is most likely to arise from inaccurate understanding of business needs in IT systems?
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What challenge emerges when companies utilize mass marketing strategies?
What challenge emerges when companies utilize mass marketing strategies?
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Which of the following is a concern related to corporate social responsibility (CSR)?
Which of the following is a concern related to corporate social responsibility (CSR)?
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What can poor Environmental Health and Safety (EHS) practices result in?
What can poor Environmental Health and Safety (EHS) practices result in?
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What year did Dr. Murdock earn his Doctor of Business Administration (DBA)?
What year did Dr. Murdock earn his Doctor of Business Administration (DBA)?
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Which certification does Dr. Murdock hold that focuses on risk management assurance?
Which certification does Dr. Murdock hold that focuses on risk management assurance?
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What is the main theme of the quote by John B. Petersen III in the content?
What is the main theme of the quote by John B. Petersen III in the content?
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In which area has Dr. Murdock NOT written an article or book chapter?
In which area has Dr. Murdock NOT written an article or book chapter?
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Which of the following industries has Dr. Murdock NOT performed audits for?
Which of the following industries has Dr. Murdock NOT performed audits for?
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What is the primary function of internal audit as described in the content?
What is the primary function of internal audit as described in the content?
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Which degree did Dr. Murdock obtain first?
Which degree did Dr. Murdock obtain first?
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What significant change is internal audit undergoing as mentioned in the content?
What significant change is internal audit undergoing as mentioned in the content?
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What aspect does operational auditing primarily evaluate in relation to management?
What aspect does operational auditing primarily evaluate in relation to management?
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Which of the following is NOT mentioned as a key expectation from stakeholders?
Which of the following is NOT mentioned as a key expectation from stakeholders?
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What is a primary concern regarding procedures documentation during operational audits?
What is a primary concern regarding procedures documentation during operational audits?
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Which consequence is likely to arise from a poorly structured organization?
Which consequence is likely to arise from a poorly structured organization?
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Operational auditing can be distinguished from traditional auditing by its focus on:
Operational auditing can be distinguished from traditional auditing by its focus on:
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The effectiveness of operational auditing is largely determined by:
The effectiveness of operational auditing is largely determined by:
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Which of the following best describes the goal of operational auditing?
Which of the following best describes the goal of operational auditing?
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What is a significant challenge that operational auditors face in modern organizations?
What is a significant challenge that operational auditors face in modern organizations?
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What is one common misconception about the role of internal auditors?
What is one common misconception about the role of internal auditors?
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What is emphasized as foundational for internal auditors in their work?
What is emphasized as foundational for internal auditors in their work?
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How can internal auditors add value to an organization?
How can internal auditors add value to an organization?
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What challenge do internal auditors face when recommending controls?
What challenge do internal auditors face when recommending controls?
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Which approach is not aligned with effective internal auditing?
Which approach is not aligned with effective internal auditing?
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In what way can the mindset of an audit team impact their results?
In what way can the mindset of an audit team impact their results?
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Which outcome is an internal auditor striving to achieve when addressing risks?
Which outcome is an internal auditor striving to achieve when addressing risks?
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What was one of the key pieces of advice given to the audit manager?
What was one of the key pieces of advice given to the audit manager?
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Study Notes
Operational Auditing: Definition and Characteristics
- Internal audit is transforming, keeping its core role of providing assurance and consulting but adapting its methods.
- Sustainability reporting is becoming a competitive advantage, requiring organizations to analyze their practices and integrate them into corporate strategy.
- Corporate Social Responsibility (CSR) is expected to be a built-in mechanism for monitoring compliance with laws and ethics. Organizations are expected to consider social, environmental, and economic impact.
- Challenges exist in CSR, including data availability, accuracy, completeness, and organizational buy-in.
- Consulting is a key part of modern internal audit, offering advice on improving operations, resolving issues, and adapting to business challenges. It's becoming more advisory and less about strictly enforcing regulations.
- Internal auditors aim to add value to the organization, but non-auditors sometimes see them as necessary evils.
- Improving operations is a significant aspect of modern internal audit, aiming to boost efficiency, effectiveness, speed, and reduce errors. This is viewed as crucial for addressing business risks.
- A key concept is linking controls to business objectives and responding to risks. Auditors should focus on aligning their work with organizational goals.
Operational Auditing: Beyond Internal Controls
- Operational auditing goes beyond checking controls. It assesses management performance and how well they achieve organizational objectives.
- Stakeholder expectations (e.g., CSR, ethics, information security, reputation) are increasing, creating more challenging environments.
- Operational auditing should examine qualitative aspects of the organization in addition to procedures and controls. This includes ensuring procedure documentation is up-to-date, relevant, efficient, secure, understood and readily accessible by employees.
- Organizational structure is important; a poorly structured organization negatively affects efficiency and objective attainment.
- Operational audits analyze multiple time periods to understand trends, patterns, outliers, and other dynamics.
Operational Audit Focus Areas
- Operational audits inspect business functions, activities, processes, and units. They investigate issues such as waste, inefficiencies, slow supply chains, poor customer satisfaction, and limited capacity to manage changes.
- Identifying issues under various factors: Human resources (poor supervision, training, and evaluation), Information Technology (system inaccuracies, poor data capture, and reporting), and Marketing (inaccurate targeting, and wastes).
- Social Responsibility issues include child labor, sweatshops, abusive management, and improper waste disposal.
- Environmental health and safety issues include poor ventilation, excessive heat, noise levels, and hazards from chemicals, machinery, and workplace designs.
Increasing Stakeholder Demands
- Stakeholder demands for advisory and consulting activities are increasing and driving the evolution of internal audit roles.
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