The Role of Management Audit in Corporate Management

Management audit is an organized review of activities and decisions of a business to analyze the current performance against the objectives. This is usually done by owners, managers or other personnel in charge of a certain business. The main goal here is to achieve the maximum sustainable performance and value for the organization. Management audit involves large-scale evaluations that look into the activities and strategies of a business and its key personnel.

In order for a management audit to be successful, there are several steps that need to be followed. The first step in the process is to prepare a written statement of the aims and objectives of the audit. A detailed description of the objectives, as well as its time scale, the scope and its results should be included in the statement of purpose of the audit. After preparing the document, it should be signed by the management team and submitted to the board of directors or the officers of the management of the company.

The next step is for the document to be reviewed by the members of the management audit committee. This is followed by the approval of the document by the board of directors or the officers of the management of the company. The next step is for the individual managers to go through the audit report. Once they have finished reading it, they should make any necessary changes that are needed. They also need to make the necessary recommendations on how to improve the performance and management policies. This will be in the interest of shareholders, the company and by extension, the company’s employees.

In order to give a meaning to the entire process of a management audit, one must know what exactly is meant by “in the interests of shareholders, the company and the overall management of the company”. It is the main objective of the audit process. This is made possible by identifying the key stakeholders within the organization. These are the people that will ultimately decide on the direction of the organization.

For instance, the largest financial resource of the company might be the stockholders. Therefore, if there are problems that affect the ability of the corporation to meet its obligations to its stockholders, it will be affected by the way management is conducting its business. The management might find itself in conflict with the stockholders. It is the job of the audit committee to ensure that the business is conducted in the interest of all stakeholders. The audit report will identify the various management deficiencies that need to be rectified and addressed in order to return the company to profitability. These include financial, operational and other problems.

There are two main objectives when conducting management audits. First is to make certain that the company is conducting business in the best interest of all its stakeholders. Second is to identify areas that require improvement in order to achieve the desired level of profitability. Management audit may be conducted by a single person or a set of experts appointed by the Board of Directors. Auditors may follow certain standard guidelines laid down by the International Association of Auditors.

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