The Human Resource Department is the subsystem of a company which attracts, retain and groom top-class talent. One of the key challenges for an organization is aligning the goals, targets, motivation, and behaviour of the very best employees with the values and business goals of the organization so that management by objective can be achieved. In the liberalized and globalised economy of today businesses need to adopt proactive approach for survival and to be successful. The challenges before HR department are frequent restructuring, retaining the existing valuable workforce, meeting the changing staffing requirements and constant innovation in training and development methods and encouraging staff through appraisal and compensation. The auditor should ensure that demands on the HR department be integrated in the area like recruitment, personnel information, training and integrated database of information of the human resources of the company. The auditor has to review the HR function of a company, point out weaknesses and recommend improvements to assist the organisation realize the overall workforce optimisation and achieve its planned objectives. Moreover, HR audit is conducted to make the HR department to be proactive and effective in the organisation and it ensures that policies on HR are implemented in the organization in the most economical and vigorous way.
Nowadays, powerful tools that facilitate analysis and decision at a fast pace for implementing the HRIS are either building in-house systems or using packaged software.