Nature

It may be annually or over a specified number of years.

•    First step in the audit is a situation analysis mainly of the company industry (e.g recent trends and prospects, position of the product, the nature of the markets, technological developments changes in demand and political or social factors that may affect the industry.

•    Second step is an appraisal of the position of the firm in the entire industry mainly the competitive outlook and current strengths and possible threats to that position.
•    Third step—the company must examine its basic objectives and major policies to determine where the company wishes to be say in 5 or 10 years or at a specific time in the future.

•    Lastly is an audit of the company's policies, procedures, programs, facilities, financial position, personnel and management, and this should identify any deviations from objectives and facilitate the revision of many major and minor plans.