An HR audit evaluates all aspects of an organization's human resources department and policies in a similar way as an audit of a company's financial accounts. The HR audit process involves developing an audit questionnaire, collecting and analyzing data, benchmarking results against internal and external standards, reporting findings, and creating a plan to address issues. An HR audit can help determine the effectiveness of an HR department and identify strengths as well as needs for improvement across key areas such as policies, employee development, management performance, compensation, recruitment, and more.