Exam2

1. Conducting a situational audit is one way to analyze a situation. Situational

audits represent an overview of the organization's history, current and future
aspects - manufacturing, marketing, finance, competition, etc. A situational audit
helps to recognize key patterns and events that will have an impact on the
company. A way to discuss major issues is also created by situational audits. If
there is internal resistance, this may help jump-start the creative process.
Situational audits collect basic information for planning the Strategic Plan,
Mission Statement, Strengths, Weaknesses, Opportunities, Threats, and Critical
Issues - much like situational analysis. The preferences of stakeholder groups
executive management, operating personnel, investors, staff, consumers, etc.
are also included in situational audits. The Situational Audit, except that it is more
systematic and organized, is close to situational analysis. To perform situational
audits, outside consultants are also used.

2. An audit determines whether an organization delivers an accurate and honest

view of its financial performance and status, something that any organization
needs to do on its own. A year-end audit is crucial to decision making for an
organization that depends on management information, providing comfort over
the quality of management accounts, or exposing systemic errors that occur
during the year. The mechanism in which an audit is carried out challenges the
effectiveness of an organisation's internal controls and procedures, offering an
external viewpoint and useful feedback.