Definition
Management Audit is a systematic examination of decisions and actions of the management to analyse the performance. Management audit involves the review of managerial aspects like organizational objective, policies, procedures, structure, control and system in order to check the efficiency or performance of the management over the activities of the Company. Unlike financial audit, management audit mainly examine the non financial data to audit the efficiency of the management. Somehow audit tries to search the answer of how well the management has been operating the business of the company? Is managerial style well suited for business operation? Management Audit focuses on results, evaluating the effectiveness and suitability of controls by challenging underlying rules, procedures and methods.
Management Audit
What is ‘Management Audit’
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.
Explaining ‘Management Audit’
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.
Further Reading
- Comparing the publication process in accounting, economics, finance, management, marketing, psychology, and the natural sciences – meridian.allenpress.com [PDF]
- Earnings management, audit adjustments, and the financing of corporate acquisitions: Evidence from China – www.sciencedirect.com [PDF]
- External auditors, audit committees and earnings management in France – www.tandfonline.com [PDF]
- Earnings management and audit quality in Europe: Evidence from the private client segment market – www.tandfonline.com [PDF]
- Earnings management and corporate governance: the role of the board and the audit committee – www.sciencedirect.com [PDF]
- Audit committee financial expertise, competing corporate governance mechanisms, and earnings management – papers.ssrn.com [PDF]
- Audit committees and quarterly earnings management – onlinelibrary.wiley.com [PDF]
