Internal Audit
Operational Audit
Since 20179 Since 2017
- Process and control
- Ranked by impact
- Practical fixes
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In one line
Whether the way the business runs is actually achieving what it is meant to.
Overview
What is Operational Audit?
An operational audit, the definition of which is provided by Institute of Internal Auditors (IIA) as “a systematic approach to evaluate and improve the effectiveness,” oncentrates on verifying if resources are used right to foster organizational development. A financial audit focuses on the finances, while an operational audit investigates daily transactions and functions of a business.
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- Clients served
- 75+
- Professionals in Business Bay
- 9
- years, since 2017
This one is usually asked for after
01
Costs have risen without a matching rise in output
02
A process works but nobody can say whether it works well
03
Two departments solve the same problem in two different ways
Detail
At Vigor Accounting and Taxation, we provide the following under our Operational Audit Services:
Our Vigor Accounting and Taxation team will help you perform monthly, quarterly or annual audits of operations according to your business requirements.
- 01
Analysis and Evaluation
The reports, which essentially involve developing and implementing strategies to address internal control gaps; removing over the top business organizations that contribute towards accomplishing such aims. The report will further detail observations collected by auditors and accompanying recommendations for management to act on their inefficiencies
Understanding Business Environment
Policy and Procedure Assessment
Verification and Walkthrough
Why it matters
Why operational audit matters
Exercise J 7 An Operational Audit Can Be Done Internally Or By Outsourcing For instance, it is structurally abstracted into factions to reinforce internal controls, drive cost savings and counteract impropriety. In addition to providing businesses with directions, performative flaws identification mechanisms should also be set up by the auditor in order for management to undertake remedial actions. Although having an operational audit is not compulsory, it can decrease the social cost and improve a firm performance.
Operational audit report users – Your average reader of the operational audit is expected to be management and process owners or line managers. It conducts an audit on each business process to detect inefficiencies in them.
- Costs have risen without a matching rise in output
- A process works but nobody can say whether it works well
- Two departments solve the same problem in two different ways
How it runs
From terms of reference to follow-up
Phase 01
Scope and terms of reference
What is being examined, what it is being measured against, and who receives the findings. Agreed in writing before anything begins.
Phase 02
Walkthrough and testing
The process as documented, the process as performed, and the gap between them. Sampled where volume makes full testing pointless.
Phase 03
Findings and management response
Every finding rated and put to management before it is written up, so the report contains the answer as well as the problem.
Phase 04
Report and follow-up
A report the board can act on, with owners and dates against each action, and a follow-up to confirm what actually changed.
Phase 1 of 4
Scope and terms of reference
What it depends on
Why an internal audit is scoped before it is priced
What moves an audit fee
Audit is quoted with a proposal rather than published, because these four things decide the work. Answer them and you will see the shape of the engagement, which is the part a fee follows from.
Transactions a month
The single biggest driver. It is the volume of testing, not the size of the turnover.
Bank accounts
Every account is its own reconciliation, and multi-currency accounts are two.
Entities on the licence
A group consolidates. Each company still needs its own audited statements.
State of the books
Books that are behind are rebuilt before the audit starts, and quoted separately.
Answer all four to see the shape
0 of 4Nothing here is a price. It is what a proposal is built from.
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Answers
Questions asked before an internal audit starts
The 6 asked most often about Operational Audit.
01Is an operational audit a legal requirement in the UAE?
No, an operational audit is not a statutory requirement in the way a financial audit or corporate tax return is. It is a management tool used to review how efficiently a business runs its internal processes. Companies typically commission one when growth, restructuring, or recurring inefficiencies make it useful, rather than because a regulator demands it.
02How much does an operational audit cost in the UAE?
The cost depends on the size of the business, the number of departments or processes reviewed, and how deep the walkthrough and testing need to go. Because scope varies so much from one company to another, operational audit work is quoted with a proposal after an initial discussion of what needs to be covered.
03How often should a business carry out an operational audit?
There is no fixed statutory frequency. Many businesses run one annually alongside their financial audit, while others commission it after a period of rapid growth, a restructuring, or when management suspects control gaps. The right interval depends on how quickly your processes and risks are changing.
04What happens if a business never does an operational audit?
Nothing happens by way of a fine, since it is not a compliance obligation. The practical risk is that inefficiencies, duplicated work, and weak internal controls go unnoticed for longer, which can affect profitability and make it harder to spot fraud or errors before they grow into bigger problems.
05Which businesses actually need an operational audit?
Any UAE company can benefit, but it is most useful for businesses experiencing growth, adding new departments, seeing recurring errors, or preparing for investment or a sale. Whether it is worthwhile for a particular company depends on its size, complexity, and how confident management already is in its internal controls.
06What documents does an operational audit team ask for?
Typically your organisation chart, written policies and procedures, process flowcharts, prior internal or external audit reports, and relevant financial and operational records. The exact list depends on which functions are under review, since the auditor needs enough material to understand the business environment before testing and walkthroughs begin.
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