Application of production scheduling methods to external and internal audit scheduling

Abstract

This paper deals with the problem of labor staffing in a service organization. The specific problem is the scheduling of auditors to audit tasks in a complex real life audit environment. We extend the methods of production scheduling to solve such a complex problem and apply these methods to a real life audit scheduling case. Each audit engagement is broken into a set of interrelated tasks and modeled as an activity network. The networks of the individual engagements are combined into a larger activity network. Even though the analysis of the large network answers certain managerial questions it does not answer the specific scheduling questions: when will each audit task start? who is the auditor? when it is completed? and how might the schedule change if the scheduling objective changes? To answer these questions the problem is formulated as an integer linear program in which the large network analysis is used to enhance its efficiency. The integer program accommodates different audit objectives and many real life situations. It is solved using existing computer codes. The model is then applied to a real life audit scheduling case to generate optimal audit schedules to all auditors and audit tasks. Naturally, the model allows for conducting parametric analysis and the generation of revised optimal schedules as the audit environment changes.