Professional Documents
Culture Documents
Shibhathulla - 14
Shibhathulla - 14
8. Management Audit helps to find out the deficiencies and defects in the
managerial working.
9. Management Audit suggests improved and better methods of managerial operations
10. Management Audit provides excellent opportunity for providing job training for of
new executives.
12. It helps the financial institutions to get better opinion before granting huge loan about borrowing
concerns.
Limitations of Mgt. Audit or Criticism of Mgt. Audit or
Disadvantages
2. Management Audit would discourage the initiative and dynamism of Potential managers.
The managers and experts argue that Management Audit which serves no material use in
practice it discourage the managers.
3. Manager will always try maintain the books of accounts and other records up-to-date, rather
than devoting much attention to achieve hyper production. Such actions will help to reduce the
risk and to escape arrows from the financial and Management Auditors.
4. Introduction of Management Audit will be costly affairs. Though Management Audit is not
statutory but voluntary in nature; Introduction of Management Audit will increase administrative
expenses.
5. Management Audit is too expensive and not suitable for small firms. Management Audit is suitable
for big and well-established firms. This audit is decorative and a luxury to small firms.
6. The Management Auditors always try to find fault with employed and their performance to justify his
appointment.
THE MANAGEMENT AUDITOR
1) Appointment of a Management Auditor
As Management Audit not statutory it is not compulsory by Law. This Audit is Voluntary in nature. The
enterprise can appoint any person to under take management audit. The law does not prescribe any
professional or educational qualification for a a Management Auditor. The scope of Audit, the periods to be
covered the time for submitting the reports are to be suggested by management and not stipulated in the
letter of appointment of the Auditor.
Qualities of Management Auditor
1. He should have thorough knowledge of concepts and principles of management.
2. He should have the ability to understand the objectives and problems of the
enterprise.
3. He should have thorough knowledge in different branches accounting financial
accounting cost accounting, management accounting.
4. He should have knowledge in marketing advertising ad sales 5. He should be familiar with the
productions procedure and also its area of operations.
promotion.
6. He should have general understanding of various commercial laws, tax laws and industrial laws.
7. He should have knowledge in economics 8. He should be competent enough to assess the progress
of the organisations.
9. He should have the knowledge about various internal control, delegations of authority.
10. He should assess the various powers and responsibilities of different levels of managers.
11. He should be familiar with computerised accounting and Labour saving devices.
12. He should have ability to see that the plan and policies adopted by the management are
suitable to the organisation.
17. He should have the courage and ability to discharge his duties