Efficiency Audit Guidelines (1993)
An efficiency audit allows a firm to systematically review its entire operation and to determine potential cost reductions. Areas for potential cost reduction include management, production, purchasing, marketing and finance. By thoroughly evaluating these areas, management can determine a realistic goal for total cost reduction. This goal may be to break even or to increase profits 10 percent more than last year. Those areas with the greatest potential for cost reduction should have the highest priority. After management establishes priorities, it will be able to develop an action plan to put the firm back on the road to higher profits.
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