what is an administrative audit

what is an administrative audit

We explain what is an administrative audit, its principles and the types that exist. In addition, its different objectives and methodology.

1. What is an administrative audit?

Administrative audit is understood as a complete revision of the organizational structure of a company or organization of any kind, as well as its control mechanisms, operation and human and material resources. It is a procedure that evaluates the organization as a whole , comparing its performance with its overall goals and per unit, to get an idea about the effectiveness of its management model.

The term "administrative audit" was used for the first time in 1935 , when James O. McKinsey, of the American Economic Association, proposed the foundations for a review of a company in all its aspects, "in light of its present and future environment. probable".

This concept would allow the subsequent emergence of ideas such as the self-audit proposed in 1955, and the development of this figure as an important mechanism in the field of competitiveness between organizations and in administrative theory.

An administrative audit obeys the following principles:

• Meaning of the evaluation . This type of audit does not measure the potential or suitability of the professionals or workers within the organization, as well as the managerial dynamics, that is, of the administrative managers responsible for coordinating the internal forces of the company.
• Importance of verification . An effective audit not only bases its conclusions on the information obtained, but also offers scientific means to interpret it and to verify that it is a reliable evaluation.
• Think in administrative terms . The focus of the auditors must always be placed on the administrative aspect of the company, and not in other areas subject to administrative management. It is an evaluation of processes and resources with a view to the mission of the company.

See also: Financial Accounting .

2. Types of administrative audit

There are two fundamental types of administrative audit:

• Functional . It focuses on the performance and suitability of managerial positions and the dynamics proposed from them.
• Analytical . It focuses on the understanding of the same processes that are launched within the structure of the company.

3. Objectives of an administrative audit

An administrative audit increases the quality levels of a company.

Every administrative audit seeks to find the deficiencies or weaknesses of the various regions of a company, to correct or solve them. This means the following:

• Optimize the administration of resources by the company.
• Evaluate the service (or product) provided by the company, in the face of customer satisfaction .
• Increase levels of quality and competitiveness through various mechanisms and management plans.
• Identify the administrative successes and replicate them in similar situations.
• Analyze the functions of each division of the company in relation to the others.
• Generate and propose new organizational schemes that solve problems at macro or micro business levels.

4. Methodology of an administrative audit

Every administrative audit is composed of four elementary steps:

• Planning .  The parameters and guidelines that will serve to focus the review of the audit are established, that is, it must first define what to look for and what the specific search criteria will be. This involves a reading of "symptoms" or apparent conflicts. 
• Instrumentation . You choose between different models of data collection and measurement of them, depending on the nature of the business and the type of conclusions you want to reach.
• Examination . The planning is applied and the data and statistics or any other type of information that responds to the preset guidelines are collected.
• Report . The closing of the audit results in a report in which the entire process is detailed and explained, the results are reported and, finally, the pertinent recommendations are made.

We explain what control in administration is and what are the phases of the control process. In addition, the types of administrative control.

The control in administration evaluates the effectiveness of the results obtained.

1. What is control in administration?

In the administration sciences  , there is talk of control to refer to  one of the main administrative functions , along with planning, organization and management, which has the task of ensuring that the actions of the organization are carried out in accordance with what is planned, or evaluate the effectiveness of the results obtained, that is, the degree of proximity to the expected ideal.

The administrative control dynamics usually involve obtaining information regarding the business process and results , and the application of corrections that are relevant to correct errors and maximize efficiency .

It is a feedback mechanism of the organizational system that depends on operating the three previous steps, especially planning, stage where expectations and goals are set . In theory, an organization whose processes and results are closer to what is planned will be much more efficient than one that gets out of the lane.

Thus, the control processes allow not only to measure the organizational performance , but also to establish just the quality standards suitable for it, and also to evaluate and take the pertinent corrective measures.

The process of suitable control , in this sense, must be economic, flexible and preventive, but also, as we have said, it must respond to the organizational objectives set.

It can help you: Quality Control .

2. Control process (phases)

The fourth phase compares the performance obtained with the initial standards.

The phases of the control process tend to be the following:

• Phase 1:  Establish standards . In this initial phase, the measurement or evaluation parameters are refined and defined, without which it would be impossible to know how well or badly the product exits. This implies four types of standards: quantity (volume of production, quantity of stock, etc.), quality (accuracy, achievement of the product), time (production times) and costs (cost of sales, production costs , etc.).
• Phase 2 :  Performance evaluation . The actual measurement of organizational processes.
• Phase 3: Comparison of performance . The expected margins of performance are compared with those obtained, compared with the initial standards to determine the margin of success or error.
• Phase 4 : Corrective action . A report is drawn up that records all of the above and shows the actions needed to improve or improve the process, such as determining at what level of the business structure are the problems and what are their possible solutions.

3. Types of administrative control

Current control is carried out throughout the entire business process.

There are the following types of administrative control:

• Pre-control or  pre-control . Being pre-action, ensure that it responds to the resources (human, material and financial) planned. This involves identifying the budgeted financial expenses, anticipating the activities to be carried out and foreseeing what it will cost to carry them out.
• Management or direction control . They are known as progress controls or cyber controls, and they monitor the path of the organizational processes before they finish, to have time to take action or force a change of route. These controls only work if you have adequate feedback.
• Control to current . This control is carried out throughout the business process, that is to say, at the same time as they are happening, in the hands of managers or the own operating personnel.
• Later control . They are carried out once the productive action is finished and they are given retrospectively, evaluating the whole journey and drawing the pertinent conclusions of what went well and what not so much. Then a report is collected that serves for future efforts and to reward or encourage