Administrative audit – What is it, definition and concept

An administrative audit is one that is responsible for examining the management and organization of a public or private entity. This, particularly analyzing the performance of senior management.

In other words, the administrative audit focuses mainly on human capital, analyzing the results and whether the resources are being used correctly. In this sense, it looks more at management positions and controls than at the staff itself.

Characteristics of the administrative audit

Administrative audits are mainly characterized by investigating the structure and organization of an entity. With this analysis, the aim is to identify weak points, failures in processes and recurring vices that may occur during the activity of the company or entity.

Likewise, administrative audits can occur, on the one hand, in an analytical way, and on the other, in a functional way.

On the one hand, with regard to the analytical form, it consists of the study and understanding of the action policies, processes, administrative dynamics and directives of the entity. On the other hand, the functional form focuses more on the start-up and administration of posts and commands with some responsibility.

It should be noted that, to carry out a complete administrative audit, both types must be carried out, the functional and the analytical, in order to be able to evaluate, on the one hand, if the leaders are adequate, and on the other, to examine if the strategy runs efficiently and effectively.

Methodology of an administrative audit

Regarding the methodology in the administrative audit, like other types of audit, it must be carried out in phases:

  1. Planning.
  2. Extraction and treatment of data.
  3. Analysis and evaluation.
  4. Conclution.
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Although these phases usually occur in common with other types of audits, the most important part in this case, that of the administrative audit, is the conclusion. This is due to the fact that this phase includes, or at least theoretically should include, a package of measures and improvements for the organization to correct and perfect the weak points found.

Examples of possible uses of a management audit

Some cases in which an administrative audit can be given within a usual framework are:

  • Evaluation of a directive to determine if there is going to be rotation or not.
  • Transition and change of management body in a company or entity.
  • External evaluation of a company before it is acquired or absorbed by another.

Although these are some of the examples in which an administrative audit may have a special relevance, it is true that in such cases the administrative audit is usually part of a comprehensive audit in which more aspects would be analyzed, such as the financial, logistics or IT.

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