How audit and evaluation differ
In any business or organization the products and performance rates must be assessed at various times during the year and definitely on an annual basis. In this assessment two important terms are used – audit and evaluation. Some have the idea that they can be used interchangeably, but this is not the case. Although they are similar in some ways, the differences between them show just how distinct they are from each other.
An audit is a process that is conducted to validate the authenticity of a product or a person’s qualifications. It is used to ensure that a product is valid and that it adheres to the product development standards. Evaluation refers to the understanding of the process of how a product is developed and how to come up with ways of making improvements. Both of these are assessments but the purpose of each one is different. An audit is carried out to determine the financial health of a business or organization whereas an evaluation is carried out to determine the efficiency and effectiveness of a process or a product. An audit can also be carried out on the security or environmental risks that may be involved.
The purpose of doing an evaluation is to determine if there is a way of doing a process in a more effective manner. In order to make improvements to a process or a product, it is essential to have a thorough understanding of it and in this way you can learn how to re-design a process to make it more efficient and cost-productive. In an evaluation a business looks at how things are being done at present, whether or not they are correct and if there are better ways of producing the same results. This is a good way to determine if the end result is what is wanted and if it is not, what would be the best way to correct the situation.
The purpose of an audit is to ensure that the practices of a business or organization are being carried out in adherence to the policies and procedures and if there are any irregularities in the finances. The efficiency and performance rates are assessed in this manner. There are two types of audits – quality and integrated. In a quality audit, the efficiency of the management in reaching targets and addressing problems is assessed, while in an integrated audit, the finances and the internal controls of the business are assessed.
Audits can be carried out internally or externally. An internal audit is one that is done by people with a direct connection to the business, but an external audit is carried out by a third party and is unbiased.
- Evaluation is ongoing and is part of the cycle of management that takes place inside a business. An audit is independent of the management and comes afterwards.
- Evaluation determines if the processes used are efficient and if they are not it looks at ways to improve the efficiency and performance rates. An audit looks at the finances of a business.
- Evaluation usually takes place at the end of a phase while an audit can be carried out at any time.
- Both evaluation and audit are used to make a business or organization better at what it does.