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Describes the function of operational auditing from a management point of view. Due to opinions on decentralization and the integral management of organizations which have gradually been generally adopted, changes are taking place in their design and control. The so‐called integral management concept assumes that more responsibilities are included in line management. As the decision making at strategic level can no longer rely on extensive, hierarchically constructed staff departments, a second opinion function should be incorporated in the decision‐making cycle. Operational auditing as a second opinion function will focus on the infrastructure of organization and information.

Based on a survey of US colleges and universities and reports the scope of operational auditing in these institutions. As a part of this study two hypotheses are formulated and tested to determine whether: (1) the scope of operational auditing differs between private and public institutions; and (2) the perceived importance of audit areas differs between auditors working for private schools and those serving public institutions. Concludes that most colleges and universities which participated in the survey utilize operational auditing to some degree. However, this utilization is rather limited in scope. Further concludes that no significant difference exists between the scope of operational auditing and the type of institution. Furthermore, the hypothesis of no significant difference in perceived importance of audit areas between the two groups of auditors cannot be rejected.

Discusses the importance of operational auditing and the crucial role of internal control in the audit process, providing a brief history of the beginnings of operational auditing and describing the recent report issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) which provides a widely accepted definition of internal control. Continues to review ways of gearing an internal audit course towards operational auditing, beginning with a description of basic methods of exposing students to operational auditing: including audit reports; interaction with practitioners; and ending with an outline of how students should actually perform an operational audit.

The purpose of this study is to examine the effects of internal audit function (IAF) quality on the operational efficiency of Chinese firms.

The authors use regression models with a sample of Chinese listed companies to test their research hypotheses.

The authors find that IAF quality is positively associated with firm operational efficiency. The result is unchanged after correcting for endogeneity via the instrumental variable method and using an alternative measure of firm operational efficiency. The authors show that IAF competence improves firm operational efficiency, but the relationship between IAF independence and firm operational efficiency is insignificant. Additionally, they find that IAF quality can only significantly improve firm operational efficiency in the presence of effective corporate governance at the firm level and strong institutions at the province level. Using path analysis, the authors find that an IAF can improve firm operational efficiency directly or indirectly by promoting firm internal control quality.

The findings of this study suggest the need for a balance between IAF competence and independence to achieve the goals of IAF. Additionally, the authors study suggests that the effectiveness of IAF is contingent on corporate governance and market-based institutions.

The study’s findings contribute to the burgeoning literature on the relationship between IAF and firm operational performance and deepen the authors’ understanding of the role of IAF in an emerging economy whose government plays a major role in promoting and enforcing internal audits. The study also empirically support the Internal Audit Governance Maturity Model proposed by the Institute of Internal Auditors.

A study of the current practices for evaluating the ex-post performance of public-private partnership (PPP) school projects in Australia via literature review and qualitative case studies has found that no consistent approach exists for evaluating operational performance. A detailed critique of international PPP audits and practices has identified existing gaps in ex-post performance evaluation. Through a process of comparative analysis and industry confirmation, a performance analysis technique aligned with international practice has been developed that can be utilised by the educational departments across Australia to evaluate the ex-post performance of PPP projects (PPPs). The paper aims to discuss these issues.

This paper opted for qualitative archival analysis of case studies using pattern matching, explanation building, time series, and comparative analysis. The data used for document analysis included value reports, project summaries, and contract documents, as well as local and international audit guidelines.

This paper reviewed current practices, identified a range of processes, and reported the best practices. However, consideration of the approaches taken in the UK and Australia for evaluating operational performance indicates that current techniques lack consistency.

The developed ex-post performance measurement framework is limited to Australian PPP school projects and, at this stage, cannot be generalised to other social PPP projects.

The paper includes implications for the development of better performance evaluation practices and audits.

An enhanced framework for measuring operational performance will increase the accountability of taxpayers in the content of their utilisation by the government.

This paper presents an enhanced ex-post performance measurement framework for education departments across Australia.

A rationale for including operational auditing as a major component in the primary auditing course, as well as in subsequent courses, in the auditing curriculum is developed. Reports and statements from professional groups and commissions, together with accounting education literature, provide a primary resource. Problems in the auditing curriculum are identified, learning style theory and the education of accountants is explored and the objectives to provide support to achieve the educational goals identified by the various constituencies are presented.

Discusses the origins of internal auditing in the rise of the joint stock company and its role in the Chinese socialist market economy. Outlines the economic benefits expected from modern enterprises and the invaluable contributions offered by internal audit to their success. Suggests a number of key areas in an enterprise where internal audit might be expected to probe. Expresses optimism about the prospects of internal audit development.

The new definition of internal auditing defines the function as an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. The purpose of this paper is to summarize an assessment of this new definition obtained through structured interviews from 11 internal audit directors of large publicly traded companies. The responses from the directors indicate that there are wide differences in viewpoints and objectives; but a definite shift has occurred in the overall scope of internal audit towards operational activities. While most of the interviewees are in conceptual agreement with the new internal audit definition, an underlying warning is vocalized: “Don’t throw out the franchise”. That is, the traditional role of the internal auditor should not be completely abandoned. These, along with other responses pertaining to related issues and suggestions for future research, are summarized throughout the paper.

Chaos theory has universal significance. It has entered into management thinking, implicitly rather than explicitly, as seen in works such as Schon′s Beyond the Stable State, Toffler′s Future Shock and Peters′ Thriving on Chaos. An attempt is made to relate chaos theory to auditing and to consider the implications for teaching.

As the final article in a series, discusses auditing with regard to facilities management. The various points applicable here are: financial; compliance; internal; operational and organizational. Explores these and their implementation thoroughly.