External Audit and business

The external audit means to develop a finite list of opportunities that could benefit the organization to avoid the threats. The external audit term finite list suggested the influences on a business. But also has aimed to identify the key variables that can offer the actionable responses. These Firms can be able to respond to the factors defensively or offensively, through the planned strategies, to minimize the impact of the potential threats.

Introduction

Key External Forces: We can divide external forces into five broad categories: (1) economic forces; (2) social, cultural, demographic, and natural environment forces; (3) political, governmental, and legal

Forces; (4) technological forces; and (5) competitive forces

The world economic recession has very vital effects on products, services, markets, and worldwide organizations. The unemployment rate raised in the United States in July 2009 over 9% and pertinent to this the US had lost 2.5 million jobs in 2008. 

It was more than the effect of world war in 1945. It expected the said rate' to raise up to 10.1%, because all the sectors were witnessing to the rising of unemployment rates, except the education, health care services, and Govt employment. The enormous amount of American citizens were joining the meager wages jobs. Modification in external forces translates the modification in consumer demand that covers both the industries and consumer's needs of products and services. The said external forces affected the product development, the nature of its positioning and the market division strategies, to offer the services and also the choice business to gain or sell.

The said external forces affect suppliers, distributors. We needed to identify and evaluate the external opportunities and threats that will lead us to develop a clear mission, plan the strategies, to achieve our long-term objectives.

The complex situations of today's business cause more countries that owe to develop the capacity to compete with the global market aggressively. All the foreign businesses and countries willingly learn, adopt the way to create innovation, and promote the research for inventions, to take the competition with their counterparts, for success in a global market. That causes to create new-technologies for competition, which can observe in Asia and Europe comparatively.

The Process of External Audit

The external audit performing needed huge human resources, comprising managers and employees on all manners. The involvement of the strategic-management process can lead to understanding and the commitment of organization members.

The individuals happily appreciate the opportunity of the strategic planners in the system, which can provide them a way to express their innovative ideas about a better understanding of their firms, industries, competitors, and the market demands. The external auditors needed for competing information and intelligence about social, cultural, economic, geo-demographic, political, legal,, environmental, governmental, and technological updates trend. Some individuals should monitor various sources of information, like magazines, trade journals, printed and electronic media. They should submit the periodic reports to the external auditors of the company concerned.

The above-discussed method can streamline strategic information and also engage many individuals in the said process. Pertinent to this, the internet can also contribute to gathering strategic information as an additional source because certain corporate universities and public libraries do this' to enhance their business. The corporate businessmen like suppliers, distributors, plus the customers and their competitors also have information to contribute to the said purpose as a source.

As the desire's information collected, then the manager should analyze it in several meetings through saturated discussions and find out the important opportunities and threats facing by the firm, and write them into a chart or board for further discussion with strategical decision-makers. The managers should prioritize it according to its merits, as a higher opportunity and least opportunity, and the higher threats up to fewer threats, and also rank them with numbers 1 to 20.

The said key factors can differ with passaging time and industry to industry, but the engagement of suppliers and distributors with an industry translates it as a success factor. It also reveals the other variables including market shares, worth and breadth of competing products, global economy, foreign affiliations, proprietary- the key accounts advantages, interest rates, pollution abatement, and population shifts, etc.

The advocates of competitive advantages in the industrial sector prefer the external factors rather than internal factors to achieve their competition goals, and some of them promoted the theme that the primary organization performance leads to achieving the competition goals.

Industrial advocates also determined competitive advantages coherently with competitive positioning within an industry. The industrialist's organization perspective entails the striving firms, who having competition in the market rather than weak industries, and the performers understanding the external key factors and their relationship with the attraction of industries.

The theorists of the industries organization do promote the external factors rather than an internal factor because the industrial competition got influence through external factors on performance and then they do their internal functional decisions, so they are appointing the manager for marketing, finance, and other areas managers, who have international understanding.

They further elaborate that sustainable performance based on industrial properties rather than internal resources including infrastructure, capacity, and economies of scale, products, brands, the competition of the market, and economy, rather than the internal operations, capabilities and building structures, etc.

They said that the economic recession's having affects on the industry based on external factors because the study of the industrial history reveals the internally firm organizations disappeared in 2008-2009, as they were the internally sound in 2006- 2007.

The above-given views and facts lead us towards the analysis that, it is not important the external or internal factors, but the strategical decisions are important to achieve the goals of competitive advantages, though the cross-sectional integration and total management of both sections would be fruitful to achieve the objectives on a large desirable scale. So the SWOT analysis just provides us the way to decide on merit to plan the best business strategy.

Conclusion:

I am concluding:

• The comprehensive study of the situation is important to plan the strategy to overcome the issue and raise our business to compete with the world economy in the market.
• It would provide the inside knowledge of the field and the best solution to tackle the internal and external factors that affect our economies.
• We should carry out the constitutional amendments based on these strategies to overcome the internal and external issues within the limitations of Quran-Wa-Sunnah, to take the tailor-made decisions to boost our county's economy.

Muhammad Israr Umar

An NGO worker for the last 17 years in Pakistan

muhammadisrarumar6@gmail.com