Every organization has a primary business objective, the reason for its existence. Whether it is a “for-profit” organization or a “not-for-profit” organization, there is always a primary business objective. And each organization is set up to accomplish that primary business objective.
The primary business objective is the lifeblood of the organization. And management has the responsibility to set up an operational structure and processes to ensure that the primary business objective is accomplished. However, to do that, there are so many other secondary objectives that have to be achieved. For example, management has to establish various departments like an:
- HR Department– to hire/train personnel
- Procurement Department – to purchase material/goods
- Accounting Department – to pay vendors and employees
- IT Department – to leverage technology
- Maintenance Department – to care for equipment/infrastructure
There are numerous other possible departments depending on the company and its primary business objective. And every department has its own departmental objectives to directly or indirectly support the primary business objective. And management has the responsibility to establish controls to ensure that these objectives are achieved.
Operational auditing plays an important role in helping management achieve its primary business objective. Internal Audit has the responsibility to evaluate those controls through the operational auditing process to determine if they are adequate and effective.