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Weakness of environmental auditing as an environmental management tool
Disadvantage of internal audits
Disadvantage of internal audits
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1. Introduction
The purpose of an environmental audit to test an organization’s environmental performance against its clearly defined and documented environmental policies and objectives. An environmental audit is one of many environmental management tools which are used to assess, evaluate and manage environmental and sustainability issues (DEAT, 2004). Environmental auditing is not only required by law in some cases, but has many benefits for an organization. Some of the many objectives of environmental audits include verifying compliance with standards of best practices, detecting any problems with the operations of the organization, measuring the environmental impact of any of the processes or activities, providing a database for corrective
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Types of Audits
Internal audits use auditors from within the department or facility being audited, and tend to cause the least amount of disruption to the rest of the workforce due to operational familiarity. They also have lowest cost, and auditors benefit from the cross-transfer of information from other areas of the workplace. However, internal auditors often have the least amount of audit expertise and the findings and corrective actions may not be of the highest quality. Internal audits are also the least independent (CSTI, 1994).
Cross audits use auditors within the same organization, but from different regions or facilities. These audits are more independent and auditors tend to have more expertise. There is also a greater opportunity for the mutual transfer of information and knowledge between auditors and auditees. These audits bear a higher cost than internal audits and are slightly more disruptive due to less operational
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They are audits which consider the current and potential environmental liabilities and risks of a site or operation. They are most commonly carried out as a precursor to the purchase of property which has been or is likely to be used for industrial or commercial purposes. They may often form part of a broader financial due diligence audit which evaluates business risks associated with the purchase of the property. The likely issues that can arise from environmental due diligence audits include historical hazardous waste disposal, which may result in pollutants contaminating the groundwater and soil, as well as jeopardizing the health and safety of employees. In such circumstances, the owner of the land where the waste was buried could be held liable for and clean-up or remediation costs, and the new owner is not inheriting the liability. (DEAT, 2004) (UNISA,
With annual revenue of US $19.02 billion, Chevron Corporation is the 16th largest integrated oil and gas energy company in the world. Globally they account for a workforce of approximately 62,000 (Forbes 2011). In 2010, the company produced 2.763 million barrels of oil per day (Chevron 2012). Corporations as large as Chevron owe a great amount of responsibility towards the society and environment above and beyond the economic and legal obligations. The industry is strongly linked to environmental scandals and companies make various efforts to address these issues (Farache and Perks 2010, 235). The following thesis will review the Environmental performance of Chevron in terms of fulfilling social needs within society and stakeholders.
Objectivity also needs to be evaluated to make sure the internal audit is reliable. The internal audit needs to be free of conflicting responsibilities as well
As good risk management can not only help to keep company’s established value, they can also assist in capitalizing and identifying to create value. According to principle 7 recommend to have an internal audit faction, the role of internal auditor is to help the board monitor and manage risk directly.(ASX 2014).
The audit committee should follow certain criterion to choose internal auditors and external auditors, and also supervise their activities and interaction thus ensuring the function of audit both internal and external.
According to the case study, the work of environmental managers often exposes them to many pollution prevention solutions, but they often have trouble getting access to production areas. Production often sees Environmental Managers as "the compliance police". Stakeholders The stakeholders in this case study include the corporation, the community and the countryside.
Both roles should ideally be independent of operations, but corporate compliance in reality owns the compliance operation policies and procedures. Internal audits have to be completely Independent. Internal audits also bring attention to the need for monitoring as a result of their auditing function. Corporate compliance ensures that monitoring and auditing occur. As far as follow-up goes, corporate compliance is responsible for such things, while internal audit is just responsible for reporting whether management responded appropriate to obtained information. Both roles are involved in compliance risk. Corporate compliance creates and implements a compliance plan to ensure that compliance risks are addressed. Internal Audit on the other hand, addresses compliance risks as part of risk based audits.
Where North Macomb Medical Associates is located, it is not very diverse. There is currently only one medical office located within the vicinity of Richmond so many of the residents seek treatment from them. Richmond is a small community that resembles a city in the middle of the country. When looking at marketing, it is important to make sure that it is appropriate for the demographics of the area. It is also important to research the area prior to opening up a medical office. If the demographics of the area show that the area is primarily Spanish speaking, it would be pertinent to make sure that there are several bilingual speaking physicians and staff.
Threats to Auditor Independence: The Impact of Relationship and Economic Bonds. By: Ping Ye; Carson, Elizabeth; Simnett, Roger. Auditing, Feb2011, Vol. 30 Issue 1, p121-148, 28p, 1 Diagram, 6 Charts; DOI: 10.2308/aud.2011.30.1.121
The next part of Audit process is to understand the business environmental aspects of the company. As part of the marketing audit project the author is going to analyze and provide detailed information on the following key environmental aspects
Audit is a process to evaluate and review the accounts and financial statement objectively. We can divide it into internal auditors and external auditors. Internal auditors have a inner knowledge of business process. Auditor has access to the much confidential information and all levels of management. But they may lose their judgement and they are not acceptable by the shareholder. “The overall objective of the external auditors is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to report on the financial statements in acco...
Environmental scanning is the process of gathering information about events and their relationships within an organization's internal and external environments. The basic purpose of environmental scanning is to help management determine the future direction of the organization (Barnat, 2004). For a business to succeed, it is important to study the business environment of the firm that consists external and internal influences that affect the firm’s decisions and performance (Grant, 2010). Environmental scanning includes the assessment of Macro and Micro environmental analysis.
Audit Risk is the risk that an auditor has stated an incorrect audit opinion on the financial statements. It may cause the auditors fail to alter the opinion when the financial statements contain material misstatement. The auditor should perform the audit to lower the audit risk to a sufficiently low level. In the auditor’s professional judgement, the auditor should appropriately state a correct opinion on the financial statement
The importance of Environmental Analysis lies in its usefulness for evaluating the present strategy, setting strategic objectives, and formulating strategies. The political environment can affect organizations. Political components influence buyer certainty and purchaser and business spending. Stability of the political environment is essential for organizations to enter new markets.
Auditing as a profession as evolved drastically over decades and as time has passed auditing activities has expanded from performing specific assurance activities for management, to assisting and advising management with their specific business activities. The Institute of Internal Auditors define internal auditing as ‘”…an independent, objective assurance and consulting activity designed to add value and improve an organisation's operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.’ (Institute of Internal Auditors, 2013) Through this definition it can be explained why auditors can be seen as the ‘eyes and ears’ of management. Concentrating specifically on the principles of Governance, the usage of Internal Auditing Standards, the Current Role of Internal Auditing in SA, reviewing current crisis, the importance of Internal Auditing to management is evident.
Environmental law is a broad form of law developed to regulate how human activities affect the physical and biological environment (Doremus et al 2008, 2). Environmental law can be large scale or small scale, global or local; but it takes the cooperation of many different agencies to be successful. Overall, environmental law has contributed to a healthier environment in many ways. Since the beginning of environmental law and regulation, society has seen advancements in sanitation, pollution, air and water quality disease control and prevention, and ultimately in quality of life.