Describe the process of performing an external audit in an organization doing strategic planning for the first time.
An external audit occurs once in a year, usually at the end of the fiscal year. The focus of any external audit is towards the performance of the company and its compliance with the required regulations. The accounting records are examined by the external auditor in order to make sure there are no errors in the financial statements presented. This is done to remove any chance of a mistake, as these financial statements are presented to the investors and important stakeholders of the company. Moreover, these financial statements also tend to showcase the financial performance of the company.
In the process of conducting the external audit, it is important to utilize the involvement of the entire staff and senior officials. This is important because the process of external audit requires commitment and understanding of the strategic planning process. Employees are also involved in this task in order to make them understand the whole operating process of the company in a better manner.
For the performing of external audit who is performing the strategic planning for the first time, the organization is needed to get as many managers and employees of its company involved in this activity as much possible. This not only fosters better understanding, but also commitment and teamwork among the employees (Bizfluent, 2017).
The process of the External audit is conducted in three stages. These are;
Gathering of the competitive intelligence and concerned information is the first stage. The process of this step needs information gathering regarding the economic forces, competitive forces, and technological forces. The organization needs to get the intelligence regarding the current trends in terms of the social, cultural, natural environmental and demographic forces. The information regarding the trends of legal, governmental, and political forces is also needed to be gathered.
The second stage includes the evaluation and analysis of the gathered intelligence in terms of the presented opportunities and threats. Managers are here needed to rank and prioritize the various factors in terms of their severity and importance. For the purpose, it is important to focus on achieving long-term goals and annually based objectives. It is important to rank factors which are measurable, practical for the firm, and hierarchical in nature of the firm. The last step is to distribute and convey the final list of the essential factors listed within the organization (Mungenast, 2013).
Reference
Bizfluent. (2017, September 26). How to Perform an External Audit. Retrieved from https://bizfluent.com/how-4424247-perform-external-audit.html
Mungenast, H. (2013). Key challenges for European logistics companies and implications for their M&A strategy. Business & Economics.
+447462439809