MANAGEMENT AUDIT

MANAGEMENT AUDIT

Management audit according to Auditing Guidelines, is an objective and independent appraisal of the effectiveness of managers and the effectiveness of the corporate structure in the achievement of company objectives and policies. Its main aim is to identify existing and potential management weakness within an organisational and to recommend ways to rectify, these weakness.

Herbert suggests the following definitions:
a) Management auditing is the terms used for evaluating the efficiency and economy of a given operation.

b) It is distinct from program auditing which is used to evaluated the effectiveness of a given operation.

c) Management auditing could be described as performance auditing.

Washbrook (1999), gives a wider definitions as follows “Because of the importance of standards procedures and controlled organisations, there has been a tendency to extend the functions of internal audit departments, to cover the checking of many aspects which are neither financial nor connected with the assets of the company in the accounting sense.

The total examination of an organisation, or part of it include checks on the effectiveness of managers; their compliance with professional standard; the reliability of management data; the quality of performance of duties and recommendations for improvement. These are variously termed management audits”. A management audit would focus attention on the managers themselves.

The primary aim of management audit is to motivate management to take action which will lead to an increase in efficiency and decrease in expenses and also increase in profitability of an organisation through exist reduction.

Philip explained management audit as a systematic, comprehensive, critical and constructive examination and appraisal of the organisational structure, management practice and method conducted by an external auditor.

It involves a review of each and every aspect of management activities and its objective is to ascertain whether or not economic resources of an organisation are used by its management in the most economic way to produce the maximum possible result in the shortest possible time in accordance with its goal management audit contains management auditors finding and specific recommendation, its objective is to motivate management to increase in efficiency and profitability of the organisation.

REFERENCES

Ejiofor, P. (2002). Managing Government owned Companies. Enugu: Fourth Dimension Publishing.

Drury, C. (2002). Management and cost accounting. London: Thomson learning Publishers.

Copeland, R. N (2004). Management Accounting, New York: John Willey and Sons 1978

Bigg, and Davis (2000). Internal Auditing, 4th Edition. London, H. F. L Publishers.

Batty, J. (2003). Management Accounting, Lagos: Kate Publishing.