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What entitles us to correctly call an evaluation of human resources an “HR Audit?” Professor Susan Nutley (2000) observed that ‘defining what an audit is and, conversely, what it is not’ was fraught with difficulties. Professor Alan Clardy (2004) observed that the term audit was used ‘rather indiscriminately’ in the literature so that ‘most any kind of study of human resources is considered an audit.’ Clearly, a human resource audit needs to be properly defined and separated from those activities that are not auditing. Clouding this is the auditing profession itself; for example, they widely use the term ‘review’ within the context of professional auditing.
So let’s define HR Auditing: An HR audit is an audit undertaken of human resources or within an aspect of human resources. Inherently placed within this definition is an understanding of what auditing means to that profession.
The key issues for audits are auditing independence, the scope and audit method, audit reporting and audit assurance (rather than management assurance). In addition, an auditor needs to be recognized as having achieved professional competence.