The purpose of a compliance audit is to see how well the agency is following applicable rules, policies, and regulations. This type of audit addresses regulatory compliance such as local, state, and federal laws applicable to its type of business.
Some examples include the following:
- North Carolina sales and use tax laws
- North Carolina payroll tax laws
- Internal Revenue Service payroll tax laws
- Federal and State grant regulations
The purpose of an operational audit is to gauge how effectively and efficiently an agency uses its resources. An operational audit assesses whether the agency can meet its business goals and objectives using its current strategies and resources. Many different factors can influence effectiveness and efficiency such as inadequate training, undocumented processes, and procedures, or lack of supervision to make sure processes and procedures are being used. An operational audit will help provide the manager and early warning sign before a major problem arises.
The purpose of a financial audit is to look at specific items shown on the financial statements. This may include looking at an agency’s compliance with contractual agreements related to the financial statements such as loan covenants. Or identifying areas of concern in the accounts receivable or accounts payable process that does not comply with agency policies and procedures.
Internal Controls Audit
An audit of internal controls is done to make sure processes and procedures are being adhered to consistently. Management is responsible for establishing internal controls. The purpose of internal controls is to assist the agency in meeting financial goals, to lower internal risks, and to aid the agency in accomplishing strategic goals and the overall mission.
The purpose of an investigative audit is to conduct an investigation based on anonymous tips or by leadership request and is focused on alleged conduct such as theft, misuse of state property, and/or conflict of interest.
Consulting and Advisory Services
The Department’s consulting and advisory services are to provide leadership with assessments and advice for improving processes that will advance the goals and objectives of the organization. In particular, the objectives are to provide the assessment and advice on the front-end of projects so that risks may be identified and managed in order that internal controls can be designed at the beginning of a project.