An internal auditor has been asked to assess whether a manufacturing plant is operating efficiently and using its resources optimally. The auditor must decide which audit procedure will best evaluate production performance, resource utilisation, and operational effectiveness.
Required: Which one of the following audit procedures is the most appropriate to use when one wants to determine the efficiency of a manufacturing plant?

Question

An internal auditor has been asked to assess whether a manufacturing plant is operating efficiently and using its resources optimally. The auditor must decide which audit procedure will best evaluate production performance, resource utilisation, and operational effectiveness. 
 Required: Which one of the following audit procedures is the most appropriate to use when one wants to determine the efficiency of a manufacturing plant?

Accepted Answer

Inspect the adequacy of staff allocated to the manufacturing plant and determine whether the reporting structure allows for adequate delegation of authority.

Answer

Obtain evidence that the plant manager has put procedures in place to ensure that the performance objectives set for the plant are achieved and this achievement has been measured.

Answer

Compare actual production outputs with the approved targets to determine whether the plant is meeting expected outcomes.

Answer

Evaluate whether the purchasing of the advanced technology of the manufacturing equipment contributes to better quality products, higher productivity and production outputs, all of which will result in higher income.

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