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CH 12
CH 12
Project Management
A Managerial Approach
Chapter 12
Project Auditing
Project Auditing
A major vehicle for evaluation is the project audit, a more or less formal inquiry into any aspect of the project
A project audit is highly flexible and may focus on whatever matters senior management desires The evaluation of a project must have credibility in the eyes of the management group for whom it is performed and also in the eyes of the project team on whom it is performed
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It is far broader in scope than a financial audit and may deal with the project as a whole or any component or set of components of the Chapter 12-9 project
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Distribute the report to the project manager and project team for their response
Follow up to see if the recommendations have been implemented
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Access to Records
In order for the audit/evaluation team to be effective, it must have free access to all information relevant to the project Most of the information needed will come from the project teams records or from various departments such as accounting, personnel, and purchasing Some of the most valuable information comes from documents that predate the project
Chapter 12-24
Access to Records
Examples of documents that predate the project:
Correspondence with the customer that led to RFP Minutes of the project selection committee Minutes of senior management committees that decided to pursue a specific area of technical interest
Priorities must be set to ensure that important analyses are undertaken before those of lesser importance
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Measurement
Measurement is an integral part of the audit/evaluation process Performance against planned budget and schedule usually poses no major measurement problems Measuring the actual expenditure against the planned budget is harder and depends on an in-depth understanding of the procedures used by the accounting department
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Measurement
It is a very difficult task to determine what revenues should be assigned to a project All cost/revenue allocation decisions must be made when the various projects are initiated The battles are fought up front and the equity of cost/revenue allocations ceases to be so serious an issue As long as allocations are made by a formula, major conflict is avoided-or at least, mitigated
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The Auditor/Evaluator
Above all else, the auditor/evaluator needs permission to enter the system If the auditor maintains a calm, relaxed attitude, the project team generally begins to extend limited trust The first step is to allow the auditor qualified access to information about the project
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The Auditor/Evaluator
The auditor/evaluator should deal gently with information gathered, neither ignoring nor stressing the projects shortcomings Recognition and appreciation should be given to the projects strengths If this is done, trust will be extended and permission to enter the system will be granted Trust-building is a slow and delicate process that is easily thwarted
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Summary
The purposes of the evaluation are both goal-directed and also aimed at achieving unspecified ancillary goals The audit report should contain at least the current status of the project, the expected future status, the status of crucial tasks, a risk assessment, information pertinent to other projects, and any caveats and limitations
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Summary
Audit depth and timing are critical elements of the audit The difficult responsibility of the auditor is to be honest in fairly presenting the audit results The audit life cycle includes audit initiation, project baseline definition, establishing a database, preliminary project analysis, report preparation, and termination
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Summary
Several essential conditions must be met for a credible audit: a credible audit/evaluation team, sufficient access to records, and sufficient access to personnel Measurement, particularly of revenues, is a special problem
Chapter 12-34
Summary
The purposes of the evaluation are both goal-directed and also aimed at achieving unspecified ancillary goals The audit report should contain at least the current status of the project, the expected future status, the status of crucial tasks, a risk assessment, information pertinent to other projects, and any caveats and limitations
Chapter 12-35
Project Auditing
Questions?
Chapter 12-36
Project Auditing
Table Files
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Project Auditing
Project Auditing
Project Auditing
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