In case of Human Resources, unlike in the area of Finance, there is no legal binding to adopt auditing. Many of the progressive companies, however prefer to have HR Audit as a part of their process.
HR Audit is also a systematic formal process which is designed to examine the Strategies, Policies, Process, Documentation, Structure, Practices in respect of Organization and HR management. It systematically and scientifically assesses the Strengths, Limitations and Development needs of the existing HR from the larger point of view of enhancing Organization's performance.
It is based on the premise that HR processes are dynamic and must be continuously redirected and revitalized to remain responsive to ever changing needs of the people and the organization. HR Audits are not routine practices. These are a means of problem solving.
Instead of directly solving the problem, like financial audit, it helps in providing insights into possible causes for current and future problems. Since it involves people and is a specialized examination it can be only done by a HR specialist. It is like a Annual Health check and plays a vital role in instilling a sense of confidence in the Management that all processes from Talent acquisition - Role Assignment - Performance Management and so on are working as per the expectations of the organization.