Management audit is audit of the management. It is similar to operational audit in several aspects. However, management audit concentrates more on the inefficiencies and weaknesses of the management.
Objectives of Management Audit
1. To identify the weaknesses and inefficiencies of management in different functional areas, such as production, sales, finance etc.
2. To analyses the different ways to overcome the inefficiencies, or weaknesses.
3. To critically review the organization structure.
4. To evaluate the ways for improving the management efficiency and to select the best are the some of the objectives of management audit.
Scope of Management Audit
Management audit may cover a specific functional area or all the functional areas such as. Sales, Inventory, Production, Purchase, Personnel, Finance, Administration, etc.
Advantages of Management Audit
1. Management audit helps in decision making areas such as make or buy, closing down of an unit, acquisition of a business, etc.
2. It also helps in assessing the efficiency of the executives. It serves as a moral check on the executives.
3. Management audit suggests ways to utilize the resources of the organization effectively.
4. Management audit helps in rehabilitation of sick units.
5. Management audit report is jointly reported by experts &om various fields.
6. The opinions and suggestions of a group of experts on the functioning of the organization are possible only through management audit.