Management audit is a comprehensive evaluation and review of the efficiency and effectiveness of management in carrying out its activities. Typically, the examination will cover several issues, including:
- The nature and quality of management decisions
- Operating results achieved
- Administration and use of resources
- Tactical and strategic planning
- Risk has taken
The audit area covers all aspects of running the organization, including production control, marketing, personnel, information technology, finance, and warehousing. An independent consultant usually does that.
The primary purpose of a management audit is to identify management weaknesses that exist and potential in an organization. Audit results are subject to evaluation. It also becomes a recommendation for fixing weaknesses.
An audit is essential to ensure that the function, efficiency, and achievement of management meet the company’s standards. It also helps in assessing the effectiveness of executives and serves as a good check on executives.