Annals of the University of Oradea: Economic Science (Jul 2015)
FINANCIAL AUDIT AND BENCHMARKING IN THE CONSTRUCTION INDUSTRY - A STEP TOWARDS PERFORMANCE
Abstract
Knowledge on and application of the legislation and professional reasoning in a professional manner related to control and situation in the field, of the control methods and procedures, is one of the essential premises that ensures efficiency and finality in the activity of patrimony control of an entity in the constructions field. A financial audit, which aims at an integrated control, provides conclusions on the entire activity. It fully characterizes the efforts and the results and it can also show faults, deficiencies and frauds in their entirety. The stocks cannot be simply taken into account as they are in a balance sheet and say straight away that the entity has sufficient stocks and it is performant. It is necessary to have a stock audit in order to highlight the accordance between the records and the physical stocks or their movement. The same reasoning also applies to outstanding debts, purchase/selling of real estate, rents of real estates, verification of contractual obligations, declarations regarding and actual payment of taxes to the state budget and the state social security budget etc. The relationship between audit and the benchmarking plan is given precisely by the final result of a performance evaluation and in order to get to a correct result it is necessary to have correct data and financial indicators. Otherwise, the risk is to evaluate an entity as performant and shortly after that it goes into bankruptcy. Benchmarking is a support instrument for decision-making, a continuous evaluation process, a mean of looking for the most performant methods to do a given activity. It is a system of information that allows an entity to show its development strategy, a technique for determining its competitive advantages and to learn about its products, services and operations by comparing them with the best ones. This instrument is part of the flexible management techniques that are based on learning, on initiative, together with ABM, reengineering, value analysis, process performance tracking. P. Drucker (considered the founder of management principles) said that “there are few things that are as important for a company’s performance as measuring performance is”. It may be asserted that most current problems are caused by the management instruments that were created under economic and social conditions that are no longer applicable to the current economic context.
