What Is Management Audit ?
Management audit is a systematic analysis of management activities, processes, policies and examination of overall management performance to evaluate the efficiency and effectiveness. The main objective of management audit is to identify errors and inefficiencies and provide suggestions to fine-tune the management process. It facilitates the organization to improve efficiency and productivity that helps to achieve long-term success.
Objectives Of Management Audit
The main purposes or objectives of management audit can be pointed out as follows:
1. To Measure The Performance
Management audit is conducted to measure the performance of different levels of management in the organization.
2. To Find Out The Errors And Frauds
It helps to identify the irregularities, weakness, errors and frauds in the management process.
3. To Provide Guidance
It helps to formulate the goals and guides the top level management to achieve those goals and objectives.
4. To Increase The Productivity
Another notable objective of management audit is to provide proper guidelines to improve productivity and profitability of the firm.
5. To Increase The Efficiency
It helps to increase the efficiency of management by reviewing the whole organizational structure.
6. To Facilitate Optimum Use Of Resources
It ensures proper allocation of resources (both physical and human resources) in the organization to achieve desired result.
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7. To Increase Moral And Motivation
Management audit helps to improve employee moral which leads to increase in their performance.
8. To Set Targets And Standards
It helps to set standards for the purpose to measure future performance.
9. To Provide Suggestions
It provides suggestions and directions for improvement which helps to obtain the goals and objectives easily.
10. To Improve Decision Making
Management audit analyzes and examines the decision making process of the organization and provides appropriate suggestions to improve the quality of decisions. So, it helps the management to make sound decisions that helps to achieve both long-term and short term goals of the company.