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NCJ Number: 69003 Find in a Library
Title: PREEMPTIVE AUDITING - FUTURE SHOCK OR PRESENT OPPORTUNITY?
Journal: MANAGEMENT REVIEW  Volume:68  Issue:8  Dated:(AUGUST 1979)  Pages:18-21
Author(s): F POMERANZ
Date Published: 1979
Page Count: 4
Format: Article
Language: English
Country: United States of America
Annotation: THE NATURE, TECHNIQUES, AND BENEFITS OF PREEMPTIVE AUDITING ARE DISCUSSED.
Abstract: THERE IS A TREND TOWARD AUDITING WHILE INVOLVEMENT TRANSACTIONS ARE STILL IN A PLANNING AND/OR EXECUTORY STAGE. THIS 'PREEMPTIVE' APPROACH ALLOWS AUDITORS TO CONTRIBUTE TO REVENUE IMPROVEMENT AND COST REDUCTION ON A PROSPECTIVE RATHER THAN AN HISTORICAL BASIS. THE PREEMPTIVE AUDIT USES TECHNIQUES NOT ALWAYS APPLIED IN A HISTORICAL AUDIT. THE PREEMPTIVE AUDIT AIMS AT DETERMINING THE FUTURE RISK OF AN OPERATION BY LISTING THE RISKS CONFRONTED BY THE ENTITY, ESTIMATING THE VALUE OF THE ASSETS OR REVENUES TO BE PROTECTED, IDENTIFYING THE EXPECTED THREATS, ESTIMATING THE OCCURRENCE PROBABILITY FOR EACH THREAT, QUANTIFYING THE ESTIMATED LOSS, AND DETERMINING THE APPROACH FOR CONTROLLING RISK. THE PREEMPTIVE AUDIT ALSO DETERMINES WHETHER DECISIONS MADE THROUGH THE LOGIC OF THE COMPUTER PROGRAMS ARE CORRECT. FOR EXAMPLE, AN EVALUATION OF THE PLANNING OF ELECTRONIC DATA PROCESSING PROJECTS MIGHT INCLUDE THE FOLLOWING STEPS: REVIEW OF THE MECHANISMS FOR SETTING GOALS; EVALUATION OF THE LINKAGE OF PROJECT PLANNING TO BUDGETING AND CONTROL OVER SYSTEMS DEVELOPMENT EXPENDITURES; AND EVALUATION OF THE PRACTICES USED TO PROPOSE NEW PROJECTS. FURTHER, PREEMPTIVE AUDITING WOULD EVALUATE THE MERITS OF NEW PROJECTS, AND SET PRIORITIES; DETERMINE THE RELATIONSHIP OF PLANNING TO SYSTEMS PERSONNEL SELECTION, TRAINING, PROFESSIONAL DEVELOPMENT, AND CAREER PATHS; AND EXAMINE THE EXTENT TO WHICH TECHNOLOGICAL TRENDS IN THE DATA PROCESSING FIELD HAVE BEEN CONSIDERED IN PLANNING ACQUISITIONS OF FUTURE EQUIPMENT. THE PREEMPTIVE AUDIT ALSO EVALUATES CONTROLS BY THE MEASURES OF PREFERRED PRACTICES. THE BUDGET IS ANOTHER IMPORTANT AREA FOR PREEMPTIVE REVIEW. ALSO, IN A PREEMPTIVE AUDIT, ALL TRANSACTIONS ARE TRACED FROM THEIR INCEPTION. THE PREEMPTIVE APPROACH SHOULD FOSTER PLANNING AND PRODUCE TIMELY EVALUATIONS OF PLANNING EFFECTIVENESS. PREEMPTIVE AUDITING CAN BE APPLIED TO ANY PROGRAMS AND ACTIVITIES THAT CAN BE QUANTIFIED AND MEASURED. (RCB)
Index Term(s): Audits; Program planning
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=69003

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