AnkushAnkush asked 4 years ago

Sin in concept no. 617.01 can you give more precise and point wise difference between internal audit and operational audit

1 Answers
RaviRavi Staff answered 4 years ago

This answer itself is little vague, there are 3 headings, these headings doesn’t mean these 3 points of differentiation. First 2 points explain traditional internal audit and last point focuses on operational audit.
Traditional Internal Auditors focuses more on whether internal financial and accounting controls are properly designed, are they properly implemented, installed are they working properly are they able to prevent or detect problem.
For example they will focus more on whether cash receipts and payments are as processed and recorded as per company’s internal financial and accounting controls, then perform cash count and ensure cash balance is appropriate.

But operation auditors think can we change our approach of doing business, can we change technology, system, what new developments can be done in organisation.
For Example they will think whether maintaining so  much cash balance is required, how cash balance requirement can reduced how overall cash transactions can come down. How we can have more payments and receipts through banking and online medium. 
Final conclusion Internal Auditor is more concerned with system installation, implementation and correction. Operational auditor is more concerned with improving business by  changing company’s approach, systems etc, bringing new developments to improve business activity.
 
For answer  Explain these differences and give examples of cash etc
Focus :- For IA = Systems For OA = Business

Approach :- For IA = Protective Function For OA = Development Functions

Compliance :- For IA = Examining compliance of systems. For OA = Changes required in systems