What is a strategic audit?

A strategic audit is fundamentally a comprehensive evaluation of an organization’s strategies and their effectiveness. This process goes beyond merely assessing financial health, which is just one aspect of an organization's overall strategy. It involves analyzing how well an organization’s strategies align with its goals and objectives, and assessing the effectiveness of those strategies in the context of both internal and external environments.

In conducting a strategic audit, various factors are examined, including the organization’s mission, vision, competitive environment, resource allocation, and performance outcomes. This holistic approach allows organizations to identify strengths, weaknesses, opportunities, and threats, leading to more informed decision-making and strategy adjustments.

The focus on the comprehensive evaluation distinguishes it from simply reviewing financials or market trends. While understanding market trends and competitor analysis is crucial and can be part of a strategic audit, these aspects are components of a broader strategic analysis rather than the entirety of the audit itself. The same applies to reviewing company policies and regulations, which can support strategic alignment but do not encompass the full scope of a strategic audit. Therefore, the emphasis on the effectiveness of strategies makes this option the most accurate description of what a strategic audit entails.