Auditing Research and Development

This chapter examines the control objectives and risk and control issues for each of the research and development functions. Organizations will need to define the future strategy for their products and allocate appropriate resources to support their objectives in this area. Many industries are governed by an array of legal and regulatory conditions. Control objectives for legal and regulatory issues involve ensuring that all the relevant and prevailing legal and regulatory issues are identified, addressed and complied with; ensuring that defined quality, performance and testing standards are achieved; and ensuring that, when appropriate, project facilities and products obtain the necessary certifications. Control objectives for product development involve ensuring that new and existing products are researched and developed in accordance with market factors and the defined strategic objectives of the organization and ensuring that all product developments are fully assessed in relation to the potential market, estimated production costs and selling price.