Implementation of Operational Auditing Using Integrated Data Envelopment Analysis (IDEA) Approach: Evidence from the Iran Insurance Industry

Nowadays، in public and private sectors، managers require information about the operation، in addition to financial information. Therefore، the independent auditors are facing with increasing demands for doing the operational auditing. General objectives of operational audit are composed of performance evaluation (in terms of the three measurements of economy، efficiency and effectiveness)، the identification of opportunities for operation improvement and offering recommendations for it. Growing trend of attention to this type of audit and performance evaluation implies that every methodology that can help to achieve the objectives of this audit would be valuable. In order to implement operational auditing، this article proposes integrated data envelopment analysis (IDEA) approach under variable returns to scale technologies، namely IBCC model، which considers concepts of three performance measurements. Case analysis results of 18 insurance companies that were examined for the year 1390 demonstrates that the proposed IDEA approach have higher benchmarking power (the measurement power of the companies with the best performance) than the conventional separate DEA (SDEA) approach.