AUDIT

Presented By,Ms. Ekta. S.Patel,1st Year M.ScNursing

*Audit is Latin word.

*Meaning of audit is official examinationof the accounts.

* In today’s global health industryorganizations or service providers arerequired to demonstrate that they haveadequate financial controls andsafeguard when they host or processdata of their customers.

*Auditing is originated from accountingpractices and the development ofaccounting audit was motivated by thecapitalist production concept, whichused it as tool for financial control.

*In health field, auditing wasintroduced in the early 20th century,as a tool to verify the quality of care,by analyzing the registers onmedical record.

•Audit is defined as “it is theprocess of evaluation or analysisof something to determine itsaccuracy or safety, or is thedocument that declares the resultof such an analysis orevaluation.”

*Audit is defined as, “it is a process toanalyze and evaluate something.”

*Audit is defined as, “it is anindependent review and examination ofrecords and activities to assess theadequacy of system controls, to ensurecompliance with established policiesand operational procedures, and torecommend necessary changes incontrols, policies, or procedures.”

Audit is a vital part of accounting.

Audits were mainly associated withgaining information about financialsystem and financial records ofcompany or business.

Recent audit includes non financialsubject areas such as, safety, security,information system performance.

It is process of verifying cost ofmanufacturing or producing of anyarticles.

A systemic and accurate verificationof cost accounts and records.

An audit must adhere to generallyaccepted standards established bygoverning bodies.

Identify government

or other relevant external

requirements.

Document pertinent laws and

regulation.

Assess whether management of organization and

information system function have considered

relevant external requirements in making

plans and setting policies, standards and

procedures.

Review internal information system department/

function/activity documents that address adherence to laws

applicable to industry.

Determine adherence to established

procedures that address these requirements.

1. External audit:

• An external audit is review of financialstatement or report of an entity,usually a government or business, bysomeone not affiliated withorganization or agency.

• It is independent review of financialdocuments provided to auditor.

• The audit is conducted by regulatoryagency hired by the entity and theauditors are generally the publicaccount.

• For government or public sector, anexternal audit will include review ofbudget, the allocation of funds and theactual expenses to ensure thebudgeted revenues and expenseswere correctly complied and used andin a private sector.

• It includes a review of organization’squarterly or monthly financial reportsas well as statements on revenues andexpenditures to ensure they arecorrectly tabulated and reported.

• These are usually conducted once ayear at the end of fiscal year.

• A year end financial report is preparedby entity, which is one of thedocuments verified in external audit.

Types of external audits:

• Financial audit

•Operations audit

•Compliance audit

2. Internal Audit:

• Internal audit has been recognizingas an aid to management formonitoring the financial performanceand effectiveness of variousdepartments/ units in the execution ofvarious program, schemes andactivity.

• Internal audit is an independentmanagement function, which involvesa continues and critical appraisal ofthe functioning of an organizationwith a view to suggest improvementsand add value to and strengthen theoverall governance mechanism oforganization or entity, including theentity’s risk management and internalcontrol system.

• According to IIA, internal audit is anindependent, objective assurance andconsulting activity designed to addvalue and improve organization’soperations. It helps an organizationaccomplish its objectives by bringing asystematic, discipline approach toevaluate and improve effectiveness ofrisk management, control andgovernance process.

• The internal audit activity evaluatesrisk exposure relating toorganization’s governance, operationand information system in relation toeffectiveness and efficiency ofoperation, reliability and integrity offinancial and operational information,safeguarding of assets, andcompliance with laws, regulation andcontract.

1. Financial audit:• Financial audits typically involve a focuson financial controls as they relate toreporting. These audits focus onaccounting controls present in thegeneral ledger or sub-ledger systems.Financial statement auditing is the focusof our external auditors. Internal Auditwill complement the work they performbased on an agreed plan.

2. Operational audit:

•Operational audits focus on the reviewand assessment of a businessprocess.

• The activities of the business processmay result in a direct or indirectfinancial impact to the organizationsuch as the collection of studenttuitions or patient account balances.

• Internal Audit primarily focuses onoperational audits but can extend thescope to include accountingprocedures that can impact financialreporting.

3. Compliance audit:•Compliance audits review the level ofcompliance with internal policies orexternal regulatory requirements.

4. Information Systems:• Audits of Information Systems look atthe overall infrastructure and networkof the University and the controls thatrelate to the security of the networkand the systems that are maintainedin support of the goals of theUniversity. They also include technicaloperations, data centre operations,project management procedures, andapplication controls.

5. Integrated Audits:• Integrated audits look at controls thataddress financial, operational,compliance and information systemsrisks. These audits are typicallycentred on a business cycle or aspecific part of a cycle or process.

6. Administrative audits:• Assess issues related to theefficiency of operational productivitywithin an organization.

7. Specialized audit:• There are number of specializedreviews that examine areas such asservices performed by third partiesand forensic auditing.

8. Forensic audit:• Traditionally forensic audit has beendefined as an audit specialized indiscovering, disclosing and follow upon frauds and crimes. In recent yearsthe forensic profession has beencalled upon to participate ininvestigations related to corporatefraud and cybercrime.

Understanding of audit area

Risk assessment and general audit plan

Detailed audit planning

Preliminary review of audit area/ subject

Evaluating audit area

Compliance testing

Substantive testing

Reporting(communicating results)

Follow up

1. Inherent risk:• Inherent risk is the risk that a financialstatement is susceptible to a materialmisstatement. This statement couldbe related to a class of transactions,account balances or disclosuresabout important company dealings.

2. Control risk:•Control risk is the risk that one ormore material misstatements mightnot be detected or prevented on atimely basis by the internal controlsystems of the company.

3. Detection risk:•Detection risk is the risk that an auditmight not be capable of detecting amaterial misstatement.

NURSING AUDIT

* Nursing audit refers to the assessment of

the quality of clinical nursing.

- Elison

* Nursing audit is the means by which

nurses themselves can define standards

from their point of view and describe the

actual practice of nursing.

-Goster Walfer

• It improves the quality of nursing care.

• It compares actual practice with agreed

standards of practice.

• It is formal and systemic.

• It involves peer review.

• It requires the identification of variations

between practice and standards followed

by the analysis of causes of such

variations.

• It includes follow- up or repeating an

audit sometimes later to find out if the

practice is fulfilling the agreed

standards.

• To evaluate the quality of nursing care given.

• To achieve the desired and feasible quality

of care.

• To provide a way for better records.

• To focus on care provided and care provider.

• To provide rationalized care thereby

maintaining uniform standards worldwide.

• To contribute to research.

Retrospective view

Concurrent view

1. RETROSPECTIVE VIEW:

• It refers to the detail quality care

assessment after the patient has been

discharged. The records can be reviewed

for completeness of records, diagnosis,

treatment, lab investigations,

consultations, nursing care plan,

complications, and end results.

2. CONCURRENT VIEW:• It is achieved by reviewing patient care during

the time of hospital stay by the patient. It

includes assessing the patient at the bed- side

in relation to predetermined criteria like errors,

omissions, deficiencies, as well as efficiencies

and also excess in the care of patients under

them. It involves direct and indirect

observation, interviewing the staff responsible

for care, and reviewing the patients' records

and care plan.

• It can be also done to identify the job

satisfaction of staff nurses in

accordance with their work

performance.

• According to Payne, the steps in audit

include;

1. Criteria development

2. Selection of cases

3. Work sheet preparation

4. Case evaluation

5. Tabulation of evaluation

6. Presentation of reports

THE BASIC AUDIT CYCLE CAN BE

DEPICTED AS;

1. Set standards

2. Observe practice changes

3. Compare with

standards

4. Implement

change

Patient is assured of good service.

Better planning of quality improvement canbe done.

It develops openness to change.

It provides assurance, by meetingevidence based practice.

It increases understanding of client‘sexpectations.

It minimizes error or harm to patients.

It reduces complaints or claims.

It may be considered as a punishment to

professional group.

Many components may make analysis

difficult.

It is time consuming

It requires a team of trained auditors.