An operational audit tests a company’s internal systems and procedures used to produce its goods and services sold to consumers. These audits test production operations for efficiency and effectiveness. Audits may be conducted by internal employees or external auditors with business experience relating to the company's operational procedures. Operational audits are usually a deeper review of company operations than a financial audit, which is conducted in an after-the-fact audit process. Benefits from operational audits include objective opinions, improved workflow or cost allocation processes and quicker turnaround times.

Staff accountants or accountants from public accounting firms usually conduct operational audits. Using staff accountants for an internal operational audit allows companies to have an objective opinion on how well the company is using their business resources. Department managers may have a tendency to fudge their audit figures since they often receive compensation bonuses or pay increases from improved operations. Public accounting firms sometimes are used for operational audits to inform outside stakeholders on the operational strength of a company’s operations. Objective audit opinions may lead companies to increase their production cost controls.

An operational audit usually uncovers inefficient use of resources or wasted capital. Auditors can test for wasted resources by reviewing the process used to obtain, warehouse and deliver production materials to the production department. Administrative departments may also be reviewed during the operational audit process. These areas can increase costs by employing too many individuals or having an improper workflow. Slow internal business processes can delay critical wealth-generating operations. Auditors often test cost allocation processes during operational audits to determine the strengths and weaknesses of this system.

Cost allocation processes are an important step in the operational audit process as well. Companies must accurately allocate all production costs to goods and services in order to earn the highest possible profits. Poor quality materials, untrained labor and inefficient production processes are significant factors that can skew a company’s cost allocation process. Cost allocation is generally based on using similar materials and labor to consistently produce goods and services. Department managers operating outside these guidelines may also slow the company’s production timeline.

Delays in business operations increase business costs and generate fewer consumer sales. Operational audits help companies find these delays and determine solutions to improve these issues. Improved production processes can lead to quicker turnaround times of raw materials to finished goods. Operational audits focus on decreasing the amount of time needed to produce and deliver goods to retailers and wholesalers. These improvements can lead to higher amounts of capital to further improve business operations.