Operational Audit A Guide for Singapore Businesses - Aden Wong

1. Operational Audit: A Guide for Singapore Businesses – Aden Wong Welcome to this presentation on operational audits. Aden Wong, an elite business solutions provider in Singapore, is here to guide you through the process of conducting a successful operational audit. Our goal is to empower businesses in Southeast Asia with the knowledge and tools to optimize their operations and achieve sustainable growth.

2. What is an Operational Audit? An operational audit is a systematic evaluation of an organization's processes, procedures, and internal controls. It aims to identify areas for improvement and ensure that operations are efficient, effective, and compliant with regulations. Objective Scope 1 2 Evaluate the effectiveness of an organization's operations to ensure they are efficient, effective, and compliant. Covers various aspects of an organization's operations, from financial management to human resources. Method Outcomes 3 4 Involves analyzing data, conducting interviews, and reviewing documents. Identifies weaknesses, recommends improvements, and helps organizations achieve their goals.

3. Benefits of Conducting an Operational Audit Operational audits bring several benefits to organizations, including improved efficiency, reduced costs, enhanced compliance, and increased profitability. It helps to identify areas for improvement and prioritize resources. Improved Efficiency Reduced Costs Enhanced Compliance Streamlined processes lead to faster turnaround times, reduced bottlenecks, and better resource utilization. Identify and eliminate wasteful practices, optimize resource allocation, and minimize operational expenses. Ensure adherence to regulations, industry standards, and best practices, reducing risks and legal liabilities.

4. Key Areas of Focus in an Operational Audit Operational audits typically focus on several key areas, including financial management, human resources, sales and marketing, production and operations, and information technology. The specific areas of focus will vary depending on the organization's size, industry, and objectives. Financial Management Revenue and expense recognition, budgeting, cash flow management, and internal controls Human Resources Recruitment, training, compensation, performance management, and employee relations Sales and Marketing Sales strategies, marketing campaigns, customer relationship management, and distribution channels Production and Operations Inventory management, production processes, quality control, and supply chain management Information Technology Data security, network infrastructure, software applications, and IT systems management

5. Preparing for an Operational Audit Adequate preparation is crucial for a successful operational audit. Organizations should gather relevant documentation, identify key stakeholders, and communicate the audit's scope and objectives to all parties involved. 1. Define Scope & Objectives 1 Clearly define the scope and objectives of the audit, including the specific areas to be reviewed and the desired outcomes. 2. Gather Documentation 2 Collect relevant documents, such as financial statements, policies, procedures, and internal control reports, to provide context and support the audit process. 3. Identify Key Stakeholders 3 Identify individuals and teams who have a direct impact on the areas being audited, as they will be key sources of information and insights. 4. Communicate with Stakeholders 4 Clearly communicate the audit's scope, objectives, and timelines to all stakeholders, ensuring transparency and collaboration.

6. The Operational Audit Process The operational audit process typically involves several stages, starting with planning and ending with reporting and follow-up. Each stage plays a crucial role in ensuring the effectiveness and efficiency of the audit. 1. Planning Define the scope, objectives, and methodology of the audit. 2. Data Collection Gather information through interviews, document reviews, and data analysis. 3. Evaluation Analyze the collected data and identify areas for improvement. 4. Reporting Document the findings, recommendations, and action plans. 5. Follow-Up Monitor the implementation of recommendations and ensure that the desired improvements are achieved.

7. Analyzing Audit Findings and Recommendations After gathering data and evaluating the organization's operations, the audit team will analyze the findings and formulate recommendations. These recommendations should be specific, measurable, achievable, relevant, and time-bound. Identify Root Causes Develop Actionable Recommendations Analyze the underlying causes of identified weaknesses and inefficiencies to understand the root of the problems. Formulate specific and practical recommendations that address the root causes and provide clear solutions. Prioritize Recommendations Provide Support Prioritize recommendations based on their potential impact, feasibility, and urgency to ensure the most impactful actions are taken first. Provide relevant resources, guidance, and support to facilitate the implementation of recommendations.

8. Implementing Operational Improvements Implementing operational improvements is an ongoing process that requires commitment and collaboration. Organizations should create a culture of continuous improvement and actively monitor the effectiveness of implemented changes. Monitor Progress Seek Feedback Regularly track progress on implementing recommendations and measure the impact of changes. Collect feedback from stakeholders to ensure that implemented solutions are meeting their needs and expectations. Adapt and Adjust Recognize Success Continuously evaluate the effectiveness of implemented changes and make necessary adjustments to ensure ongoing improvement. Recognize and celebrate the achievements of individuals and teams involved in implementing successful improvements.