Professional Documents
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External Audit - Total
External Audit - Total
Audit in the
Business
Organization
s
J E F F R E Y R . AYA L A
Nature of External Audit
The purpose of an external audit is to develop a finite list
of opportunities that could benefit a firm and threats
that should be avoided.
As the finite suggests, external audit is not aimed at
developing an exhaustive list of every possible factor that
could influence the business.
It is aimed at identifying key variables that offer
actionable responses.
Firms should be able to respond to the factors by
formulating strategies that take advantage of external
opportunities or that minimize the impact of potential
threats.
External Forces the Affects
Business Organizations
Economic Forces - refer to the nature and
direction of the economy in which business
operates.
Example: Straight line, Moving average, Simple linear regression, and Multi linear regression
EFE and CPM
External Factor Evaluation matrix - (EFE) Competitive Profile Matrix - Matrix (CPM) is a
Matrix allows strategists to summarize and tool that compares the firm and its rivals and
evaluate economic, social, cultural, reveals their relative strengths and
demographic, environmental, political, weaknesses
governmental, legal, technological, and
competitive information
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