Content area
Full Text
Keywords
Capital budgeting, Investment, Performance, Learning, Design, Organisational development
Abstract
Focuses on the possible benefits and problems generated by the implementation of a post-auditing (PA) system. This research work was structured as follows: first, an integrated model for the design of a firm PA system has been elaborated, based on the critical re-elaboration of specialised literature; an empirical investigation (a survey) has been conducted in a sample of large companies operating in Italy, to analyse the most common configurations of PA systems. The aims were: to understand the behaviour of firms, with respect to the design variables identified in the previous section; to identify common patterns and possible correlationships between the solutions adopted in the different parts of the PA system. The results of the empirical analysis show a substantial alignment between the model and the configuration of PA systems implemented by firms (with some important exceptions), which seem to be influenced to a great extent by the objective with which the PA system has been implemented (project performance control vs learning).
1. The post-audit and the capital budgeting process
The post-audit (PA) of investments is the control process aimed at making an overall revision of all those activities concerning the management of an investment proposal, from its definition, to its implementation, up to the end of its life.
The PA process represents the last phase of a much longer and complex process, which in literature is generally called "the capital budgeting process" (see Figure 1) [1].
The PA process is different from a simple project monitoring, for the scope of the analysis, and, consequently, for the degree of completeness. Indeed, the PA process is not limited to the control of the start-up phase (in terms of costs and time), but the focus of the analysis is extended to the operational phase (that in which the investment begins to generate cash inflows). Moreover, as we will see in the following sections, the analysis of the actual cash-flow patterns of the investment can be used both for an immediate feedback on the management of the controlled investment, and to improve the effectiveness of all the phases of the investment process.
Several PA processes can be performed during the different stages of the...