Value For Money Audit Procedures as Important Internal Control and Compliance Measures In Business Organizations
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The value for money audit unit is a very essential and delicate section which exists in the internal control and compliance department of any standard business organization. In most cases, value for money audit is also known as compliance audit. The major reasons for carrying out this form of audit in an entity is to ensure that funds have been used for the purposes for which they were allocated, all transactions have been duly authorized and fully accounted for, returns regarding the use of approved funds have been received from the appropriate authorities and also, to safeguard the assets and all productive properties of the business entity.
In the private sector, value for money audit supplements other audits including the periodic financial audits but in the public sector (that is government-owned establishments), it is a major audit which proves itself to be very indispensable as far as ascertaining and ensuring that accountability and transparency prevails in the activities and operations going on within the walls.
Further to this, the value for money (VFM) audit unit in a business organization is saddled with the responsibilities of ensuring economy, efficiency and effectiveness of the day-to-day business operations.
• With regards to ensuring economy of operations, the VFM ensures that work is done and carried out with due care skill and diligence and in such a rational way that raw materials, spare parts and other business inputs are procured in the appropriate and required quantities and at the possible lowest costs without sacrificing or giving up product quality.
• As it relates to efficiency, the effect of value-for-money audit is to ensure that maximum useful output is gained from all material, human as well as other miscellaneous inputs used up in the course of production. Also, it ensures that a minimum level of resources is applied to achieve a given level of output. Hence, optimal material utilization.
• As it concerns effectiveness, VFM ensures that the actual results and outputs derived from the production process helps in achieving business goals and objectives. This can be easily ascertained by financial analysts and experts through the application certain performance assessment procedures (variance analysis inclusive) against laid-down budgets and goals. Take good note that performance measurement and comparison against set objectives is the cornerstone and bedrock of effectiveness.
Moreover, the importance of measuring business results cannot be over-emphasized. It galvanizes the human capital and elements inherent in a business arrangement to pursue set goals such that what gets measured is what gets done. If you fail to measure your results, you can never tell success from abject failure. If you cannot see success then, how can you ever reward it? If you cannot reward a resounding and outstanding success probably, you are just encouraging your failure. And never can you learn from your success if you cannot see it. Finally and ultimately, you cannot win the support of the management if you cannot demonstrate results.
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The value for money audit unit is a very essential and delicate section which exists in the internal control and compliance department of any standard business organization. In most cases, value for money audit is also known as compliance audit. The major reasons for carrying out this form of audit in an entity is to ensure that funds have been used for the purposes for which they were allocated, all transactions have been duly authorized and fully accounted for, returns regarding the use of approved funds have been received from the appropriate authorities and also, to safeguard the assets and all productive properties of the business entity.
In the private sector, value for money audit supplements other audits including the periodic financial audits but in the public sector (that is government-owned establishments), it is a major audit which proves itself to be very indispensable as far as ascertaining and ensuring that accountability and transparency prevails in the activities and operations going on within the walls.
[Post Image Courtesy of Stuart Miles at FreeDigitalPhotos.net]
Further to this, the value for money (VFM) audit unit in a business organization is saddled with the responsibilities of ensuring economy, efficiency and effectiveness of the day-to-day business operations.
• With regards to ensuring economy of operations, the VFM ensures that work is done and carried out with due care skill and diligence and in such a rational way that raw materials, spare parts and other business inputs are procured in the appropriate and required quantities and at the possible lowest costs without sacrificing or giving up product quality.
• As it relates to efficiency, the effect of value-for-money audit is to ensure that maximum useful output is gained from all material, human as well as other miscellaneous inputs used up in the course of production. Also, it ensures that a minimum level of resources is applied to achieve a given level of output. Hence, optimal material utilization.
• As it concerns effectiveness, VFM ensures that the actual results and outputs derived from the production process helps in achieving business goals and objectives. This can be easily ascertained by financial analysts and experts through the application certain performance assessment procedures (variance analysis inclusive) against laid-down budgets and goals. Take good note that performance measurement and comparison against set objectives is the cornerstone and bedrock of effectiveness.
Moreover, the importance of measuring business results cannot be over-emphasized. It galvanizes the human capital and elements inherent in a business arrangement to pursue set goals such that what gets measured is what gets done. If you fail to measure your results, you can never tell success from abject failure. If you cannot see success then, how can you ever reward it? If you cannot reward a resounding and outstanding success probably, you are just encouraging your failure. And never can you learn from your success if you cannot see it. Finally and ultimately, you cannot win the support of the management if you cannot demonstrate results.
TAGS: value for money audit approach, value for money audit accounting, purpose of a value for money audit, how to conduct a value for money audit, how to do a value for money audit, three e's of value for money audit, value for money audit definition, value for money audit in public sector, value for money audit wikipedia, benefits of value for money audit, what is meant by value for money audit, difference between value for money audit and performance audit, aspects of performance measured by value for money audit, value for money audit case study, discuss value for money audit, deloitte value for money audit, describe value for money audit, value for money audit effectiveness, why is value for money audit essential, elements of value for money audit, explain the purpose of value for money audit, criteria for value for money audit, techniques for value for money audit, procedures for value for money audit, auditor general value for money audit, value for money audit in nigeria, value for money audit in public sector in nigeria, value for money audit in private sector, value for money audit value for money audit in uganda, value for money audit in malaysia, limitations of value for money audit, types of value for money audit, concept of value for money audit, value for money audit plan, value for money audit stages, value for money audit template, value for money audit techniques, value for money audit uk, problems with value for money audit, problems associated with value for money audit
Value For Money Audit Procedures as Important Internal Control and Compliance Measures In Business Organizations
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