What is the focus of an operational (performance) audit?

An operational (performance) audit focuses on assessing the economy, efficiency, and effectiveness of an organization’s operations. This type of audit goes beyond traditional financial reporting to evaluate how well an organization is achieving its goals and objectives. It looks at processes and systems, assessing whether resources are being used effectively and whether the operations align with the organization’s strategic aims.

By examining the efficiency of operations, the audit can identify areas for improvement, reduce costs, and enhance productivity. This focus on performance helps organizations make informed decisions to drive success and optimize their resources. The emphasis on the three E's—economy (minimizing costs), efficiency (maximizing outputs from given inputs), and effectiveness (achieving desired outcomes)—is what differentiates an operational audit from others that focus primarily on financial or compliance aspects.