Management Audit

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Question 1
Management audit is a term used to describe the kind of audit work carried out to look into the economy, efficiency and effectiveness of the organization and its component parts. Efficiency in this sense has to do with determining whether resources (personal and property) are being used optimally within the bounds of what is practically feasible. Effectiveness involves determining whether resources are being used to proper effect. Economy relates to the avoidance of unnecessary waste. Some authors based on this meaning link management accounting ton value for money audit and performance audit. According to William et el (2005), Management audit is a review to determine whether managers are implementing the policies and procedures specified by top management. It’s an analysis and assessment of competencies and capabilities of a company's management in order to evaluate their effectiveness, especially with regard to the strategic objectives and policies of the business. The objective of a management audit is not to appraise individual executive performance, but to evaluate the management team in relation to their competition. Gray et el (2002) went further to explain management audit as a term used describe the kind of audit work carried out by internal auditor, although it may be argued that has been introduced more in to the audit of national and local government and the public sector generally. In many ways, management auditing is very similar to effectiveness auditing in that the aim the auditor would be to direct attention to the formulation of management objective and to know the extent to which management objective has been met. Investopedia explains management audits are often necessitated by major changes in a business. Some of the events that call for a management audit are top management changes, mergers and acquisitions, and succession planning. It is a systematic assessment of methods and policies of an organization's management in the...
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