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Managemant audit


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Managemant audit

  1. 1. Presented by; Neetu.P.S Sandhya.S.P Sanjana.R Shumaila Racheal Bosco
  2. 2. Meaning :- The Examination review of various policies and action of the Management on the basis of certain specified objectives. Definition :- Management Audit is Independently Examination of organisation structure, operation function ,Analyzing goals ,plans ,Policies, Activities, weaknesses and Evaluation of earning capacity of the Management. 2
  3. 3. To identify the level of achievement of the main objectives of organisation . To indentify the defects management executives . or irregularities of To ensure that the management is going to achieve the objectives. To help the management to do administration of the operations. 22/09/2012 3 efficient
  4. 4. To help management executives in the effective discharge of their responsibilities. To suggest to the management the way and mean available to achieve the objectives. To improve the profitability of the organisation. To obtain or utilize the full efficiency of the management. To help the management executives in the effective discharge of their duties. 4
  5. 5. Scope of Management Audit Management audit will depend upon the objective and requirement it’s Scope of Management Audit Briefly Explanation of Review :Objective , goals , plans and policies of Management. The results of various operations department-wise. The planning process and appraisal of planning and utilization of finance and human resources. Physical processes and activities of delegation of authority. 5
  6. 6. Organistion structure and appraisal of result of such management decisions. Rules , regulations and methods fixing responsibility by management executives. i.e., systems and procedures of the organisation. Management office information operations systems and appraisal of its effectiveness. Management control Personnel policies system and techniques followed by management. Selling and distribution system and appraisal of its effectiveness. Operation its the purchasing and productions of there effectiveness. 6
  7. 7.  Management audit set up policies and objectives in view of changing environment, competitors strategies, change in technology, consumers preferences etc.  It provides scope to business to interact openly with the environment and maximize the benefit of environmental opportunities  It helps management in improving its performance in execution of policies
  8. 8.  It helps management in utilizing its resources efficiently that is it helps to find out weather the lone amount have been properly utilized or not.
  9. 9.  Management audit periodically assess the performance of various managers and link incentives with such assessment.  Government and foreign collaborators is interested in getting management audit conducted to examine the efficiency of management  Financial institute may like to get management audit conducted before advancing lone
  11. 11.  An auditor is an accountant who officially examines the accounts of organizations
  12. 12. Qualities of an auditor cover two aspects namely;  Technical qualifications  Personal qualities
  13. 13. Professional qualification in accounting [CA]  Standard of accounting & auditing practices  Member of recognized professional body like Institute Of Chartered Accountants Of India 
  14. 14. He must have an enquiring mind & analytical approach to his work  He must be alert & should posses common sense in abundance.  He must not be influenced by others i:e must posses a firm character  He must have integrity. People should have faith in his work  He must be methodical in his work 
  15. 15. He should not disclose client’s affairs to others without necessary permission  He should not be unnecessarily suspicious though he has to be skeptical  He should be tactful & pragmatic in approach in dealing with the clients & their officers or staff  He should be courteous with his own staff & should be conscious of their capabilities & limitations  He must be able to maintain poise, dignity & courtesy in dealing with others  He should be independent & must not compromise his independence for any material or social gain. 
  16. 16.  Management audit provides information about strong and weak points of the management after reviewing policies and programs. So, it helps to the smooth operation of an organization.  Management audit provides suggestions to the management which helps to maintain effective management.  Management audit helps the management providing suggestions to attain goal of an organization.
  17. 17.  The introduction of management audit technique involves heavy expenditure.  Managers will hesitate to take initiative, as the management auditor will always pinpoint some shortcomings in the action.  Managers will always try to keep the records up to date rather than improving efficiency and reducing the costs.
  18. 18.  Due to ineffectiveness and inefficiency of the management auditor, in all cases, management audit cannot provide resultoriented service.  Management auditors are sometimes engaged in some activities detrimental to social objects of auditing, for example, evasion of tax.