Different types of Audits
Consumption Audit
A consumption audit is also known as an Energy Audit. It is an inspection, survey, and analysis of energy flows, for energy conservation in a building, process or system to reduce the amount of energy input into the system without negatively affecting the output(s). In commercial and industrial real estate, an energy audit is the first step in identifying opportunities to reduce energy expense and carbon footprints.
When the object of study is an occupied building then reducing energy consumption while maintaining or improving human comfort, health and safety are of primary concern. Beyond simply identifying the sources of energy use, an energy audit seeks to prioritise the energy uses according to the greatest to least cost-effective opportunities for energy savings.
Level/Types of consumption audit
Common types/levels of energy audits are distinguished below. There are four levels of analysis that can be outlined.
- Level 0 – Benchmarking:
This first analysis consists in a preliminary Whole Building Energy Use (WBEU) analysis based on the analysis of the historic utility use and costs and the comparison of the performances of the buildings to those of similar buildings. This benchmarking of the studied installation allows determining if further analysis is required;
- Level I – Walk-through audit:
A preliminary analysis made to assess building energy efficiency to identify not only simple and low-cost improvements but also a list of energy conservation measures (ECMs, or energy conservation opportunities, ECOs) to orient the future detailed audit.
This inspection is based on visual verifications, the study of installed equipment and operating data and detailed analysis of recorded energy consumption collected during the benchmarking phase;
- Level II – Detailed/General energy audit:
Based on the results of the pre-audit, this type of energy audit consists in energy use survey in order to provide a comprehensive analysis of the studied installation, a more detailed analysis of the facility, a breakdown of the energy use and a first quantitative evaluation of the ECOs/ECMs selected to correct the defects or improve the existing installation.
This level of analysis can involve advanced on-site measurements and sophisticated computer-based simulation tools to evaluate precisely the selected energy retrofits;
- Level III – Investment-Grade audit:
Detailed Analysis of Capital-Intensive Modifications focusing on potential costly ECOs requiring a rigorous engineering study.
Hazardous Waste Audit
Hazardous waste generators have a duty of care in ensuring that their wastes are disposed of in an environmentally acceptable manner. Increasingly, generators are being made liable for environmental damage at the site of a waste disposal contractor if their wastes have been accepted by that facility.
A Hazardous waste audit is a procedure that permits generators to examine the performance of waste vendors and to assess their potential liability as a result of using the site. Post-audit decisions involve estimating the degree of risk and selecting appropriate waste contractors.
Waste Disposal Audit
One of the most overlooked expenses on an income statement is waste disposal and recycling. A Waste Disposal Audit helps a company to save 25% to 60% on its waste Disposal expense!
Benefits of waste disposal audit
Conducting a proper and systematic waste disposal audit has the following benefits for a company or organisation.
- Improved efficiencies
- Better practices
- Billing overcharges
- Improper tax applications
- Better pricing
Cost Audit
- Verification of the cost accounting records such as the accuracy of the cost accounts, cost reports, cost statements, cost data and costing technique and
- Examination of these records to ensure that they adhere to the cost accounting principles, plans, procedures, and objective.
Objectives of Cost Auditing
- Prospective Objective
Under which cost audit aims to identify the undue wastage or losses and ensure that costing system determines the correct and realistic cost of production.
- Constructive Objectives:
Cost audit provides useful information to the management regarding regulating production, economical method of operation, reducing the cost of operation and reformulating Cost accounting plans.
Steps of Cost Auditing
- Review
The auditor-review committee reviews and studies the financial framework of the project in hand. Thi includes assessing data from the entire cost department including wages, raw material prices, clearance prices, expense on machinery and insurance, etc
- Verification
This step involves thorough verification and cross-checking of the planned financial framework and the actual cost (Real-time) expenditures of the project in hand.
- Reporting
Types of Cost Auditing
- Cost Audit on behalf of the management:
- Cost audit on behalf of a customer
- Cost Audit on behalf of Government
- Cost Audit by the trade association
- Statutory Cost Audit
2 Comments
Unknown · April 14, 2018 at 9:51 AM
Very useful information!
Arijit · April 26, 2018 at 10:27 PM
Thank you.