Management Audit

Introduction to Auditing

In the beginning the meaning and the use of the term of audit was confined to a cash audit. Today the word audit has a wide usage and it now means a through examination of the books of accounts and its final aim is to verify the financial position disclose by the Balance Sheet and the profit and loss account of a company.

An audit can be defined as an intelligent and a critical examination of the book of accounting books of the business, done by an independent person or body of persons qualified for the job with the help of document, vouchers, information and explanation received from authorized. The auditor may satisfy himself with the authenticity of financial accounts prepared for a fixed term and ultimately, so that

1. The balance sheet gives a true and fair view of the state of affairs of the organization.

2. The profit and loss accounts show a true and fair view of the profit and loss for the financial period.

3. The accounts have been prepared as required by the law.

What is Management Audit?

Management Audit is an examination, scrutiny and appraisal of the plans, policies, objective, and means of operation and use of physical facilities. It reviews the policies action of management. Management Audit is a method to evaluate the efficiency of management at all levels throughout the organization. It comprises the investigation of a business by an independent body in order to ascertain whether sound of management prevails and to report on its efficiency.

Objective of Management Audit:

1. To reveal the defect or weakness in any element examined and suggest improvement.

2. To ensure the most efficient system required for the smooth running of the business.

3. To obtain the efficiency and effectiveness of the company.

4. To suggest ways and means for the achievement of objectives and targets set by the management.

5. To evaluate performance by relating inputs with outputs....