Post‐completion audits: avoiding the pitfalls

Abstract

Investment project post‐completion auditing (PCA) is capable of yielding significant benefits to firms wishing to tighten the control of existing projects and also to improve their decision‐making and planning procedures. An increasing proportion of large companies now operates post‐audits in pursuit of these benefits. However, adoption and implementation of PCAs is not problem‐free. Among the likely drawbacks is the possibility of deterring staff from advancing proposals for new investment. However, evidence from an empirical study shows that there appears to be no significant relationship between adoption of PCA and level of investment expenditure, in either absolute terms or when adjusted for disposals or size of firm. This suggests that some of the difficulties typically associated with PCAs may be overstated. Concludes with a survey of the issues which would‐be adopters of PCAs should address and offers a checklist of action points designed to lubricate the introduction of PCAs.

Citation

Neale, C.W. (1995), "Post‐completion audits: avoiding the pitfalls", Managerial Auditing Journal, Vol. 10 No. 1, pp. 17-24. https://doi.org/10.1108/02686909510079675