Statements of Position



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Accounting firms were making reviews of client operations long before audits of financial statements became commonplace. However, the literature of the AICPA contains few references to and little guidance for operational audits ing, the term in general use for reviews of operations. The Special Committee on Operational and Management Auditing was appointed in 1978 to research the subject and develop appropriate information for Institute members. This report contains information on operational auditing engagements which the Special Committee believes will be of interest to practitioners. It has been prepared with the following objectives: 1. To define operational audit engagements and to provide descriptive information on engagements that may be referred to as such in an agreement on services to be rendered. 2. To describe important differences in approach between operational audits and financial audits. When the AICPA formed the Special Committee on Operational and Management Auditing, with members suggested by its Auditing Standards, Management Advisory Services (MAS), and Federal Government Divisions, it was asked to consider questions such as: a. What is operational auditing? b. What are the similarities and differences between an operational audit and an audit of financial statements? c. To what extent do professional standards apply to operational audits? d. What measurement criteria might be used in operational audits? e. What form of report may be appropriate for operational audits? This document responds to these questions and tries to cover, as well, the unasked questions that we, as practitioners, would want answered. The content is not intended to be authoritative, but simply to provide information that would be useful to those who wish to become more familiar with the nature of operational audits and with the role of the CPA firm that provides operational auditing services. For those operational audit engagements which would be subject to the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the United States General Accounting Office, review of that publication and the AICPA publication, Guidelines for CPA Participation in Government Audit Engagements to Evaluate Economy, Efficiency, and Program Results, would be helpful.

Publication Date


Relational Format



Management audit


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Operational auditing by CPA firms; Exposure draft (American Institute of Certified Public Accountants), 1980, June 18



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