Process of External Audit

In order to conduct an External Audit, we need to collect information regarding economic, social, demographic, cultural, legal, environmental, technological and governmental trends. We must include as many stake holders as possible to conduct this audit. The employees when included in this process have better understanding of the organizations goals and objectives. The collection of information can be done from various sources. These may include and not limited to internet, university, corporate and public libraries etc. Customers, suppliers, competitors, distributors.

Some of the key factors that influence the External Audit are;

Economic Forces

The economic factor is one of the key forces. It directly effects the strategies any organization uses. For example the increase in interest rate will make it difficult to acquire capital. Some of the key factors of Economic forces include,

·         Economic conditions of foreign countries

·         Export/import factors

·         Income differences by customer/region

·         Demand shift for goods and services

·         Monetary policies

·         Price fluctuations

·         Tax rates

·         Exportation of capital and labor

Economic forces in our schools case include income differences by customers, tax rates, fee structure, infrastructure cost changes that may include rent and maintenance.

Social, Demographic, Cultural and Environmental Forces:

Pakistan today is quite different from what it was yesterday and it will be different tomorrow. A country evolves and changes with the passage of time. The social, demographic and cultural forces are important part of the external audit. The population change and the demographics are key factors. People are sensitive to their cultural and environment.

Following are some of key external factors asocial with social, demographic, cultural and environmental forces of external audit process.

·         Racial equality

·         Government regulation

·         Energy conservation

·         Social responsibility

·         Recycling

·         Waste management

·         Ozone depletion

·         Endangered species

All of the above forces are also valid for our school. Our school believes strongly that we need to educate students regarding the environmental changes and how we can preserve our environment. It is very essential for us to make such policies that we cater for the needs of future generation with the emphasis on neat and clean environment.

Our school will make sure to include everyone in our system including all the races and religions. The process of audit will check to see if there is any discrepancies in our aims and policies or whether we are straying from our objectives, which include gender and racial equality. We will strive to follow all the government and United Nations policies regarding the human rights.

Political, Legal and Government Forces

These forces affect the strategies directly. The changes in Government laws and regulations poses serious threats to an organization. These changes may also include changes in Taxation policies which will directly influence the companies’ income. It’s not necessary that these laws and policies have a negative impact on an organization. Whatever the impact maybe the organization needs to perform and external audit of these forces to keep their direction right.

In our case political and legal forces play a major role, we need to make sure that we are politically neutral with no political affiliation when it comes to our school. We will follow and make sure through the process of audit that we are following all the government policies and procedure. Furthermore, we do not want to offend any political force and remain neutral. No individual within the organization will be allowed to play external politics inside our school. For that purpose a background check for all employees will be carried out before the inclusion of the employees. The employees should fill an affidavit mentioning that they will not include in any type of political activities inside the school and shall refrain from all such activities outside the school as well in which their school may be defamed. 

Technological forces

Technology is changing very rapidly and it poses threats to an established organization unless the organization adopts the new technology and innovate. This can only be done through the external audit, which makes it easier to take decisions regarding the technology. For example when the android operating system of mobiles came into being the mobile phone giant Nokia at that time failed to incorporate it in its systems. This resulted in a very negative impact for the organization.

Through the process of the audit we will make sure to remain up to date with regards to technology. We will try to include all the latest technology that is available in the market. We will make the electronic attendance for the employees and try to incorporate it to students as well. The parents will receive text messages about the daily attendance of their child. Their Child’s progress will be available online and monthly progress report will be mailed to them.