√ Definition of Management Audit, Purpose, Benefits, Stages, Scope
Definition of Management Audit, Purpose, Benefits, Stages, Scope – In this discussion we will explain about management audit. Which includes the definition of management audit, management audit objectives, management audit stages, management audit scope with complete and easy-to-understand discussion. For more details, please see the review below carefully.
Definition of Management Audit, Purpose, Benefits, Stages, Scope
Let's discuss the meaning first carefully.
Definition of Management Audit
Management auditing is a technique that covers a wide range of areas regarding procedures, assessment methods, feasibility and approaches. Management checks are made in analyzing, assessing, reviewing and weighing the results the work of the company compared to predetermined standards or guidelines determined from company. The purpose of conducting a management audit is to evaluate the efficiency and effectiveness of the company (Alexander Hamilton Institute, 1986:1)
Arens and Loebbecke (2003:12) argue Management Audit is an evaluation of all procedures and company organizational methods, in order to evaluate the level of efficiency and effectiveness company.
Meanwhile Carmichael and John Willingham (Auditing Concepts and Methods) put forward A Guide to current auditing theory and practice. 1996:625). Management audit is a systematic review of the activities of a particular organization in relation to certain objectives purpose of assessing activity, identifying opportunities for improvement, developing recommendations for improvement or further action carry on.
Management Audit Objectives
Management audit objectives are as follows:
-
Assessment of control
Related to administrative control (administrative control) in a company whose purpose is to determine whether the existing controls are appropriate and have proven effective in achieving the stated objectives company. -
Assessment of Implementation
The auditor collects information to determine whether the company's activities are running effectively and efficiently. -
Providing Assistance to Management
By providing recommendations for improvements needed by the company. And as an auditor to help management first understand the applied management principles and management functions namely planning organizing, staffing, leading and controlling.
Management Audit Benefits
The benefits of a management audit are as follows:
- Evaluating goals, policies, targets, regulations, procedures for organizational structures that have not been previously established.
- Evaluating the measurement criteria for achieving organizational goals and assessing management achievements
- Independently and objectively assess individual achievements and activities of specific organizational units.
- Performing efficiency, effectiveness and cost-effectiveness assessment of management planning and control systems.
- Find/identify organizational problems that arise and if possible determine the causes.
- Assess/convince the reliability and usefulness of several management control reports.
Stages of Management Audit
According to Alexander Hamilton, there are several stages in carrying out a management audit (Management Audit: Maximizing Your Company's Efficiency Effectiveness. 1996).
Project Scope Definition
At this stage of the management audit, it is the stage of getting to know the objective in order to gain an understanding of the background of the activity being examined. This can help the auditor more easily identify problems that arise, find the causes and then take corrective action.
Plan, Preparation And Organization
Management checks at this stage are researching and also tracing the scope of each source of documentation, then analyzing and then updating
Fact Gathering and Document Updating
Collection of all notification data relating to the scope of the project in question. This data is obtained from correspondence and for non-formal information can be obtained directly from employees by conducting interviews.
Research And Analysis
At this stage an examination is carried out, collecting all empirical data and evidence which is very important in supporting a conclusion. And then the research will be modified according to the planning and evaluation objectives of certain scope conditions.
Report
From the results of the tests and examinations discussed, in the final stage an overall audit report is made which is the conclusion of the inspections carried out.
Management Audit Scope
The scope of the management audit includes all aspects of the management audit activity. This scope can be in the form of all activities or it can only cover a certain number of programs or activities carried out by the company.
The management audit period also varies. Often within a period of one week, several months or even more than one year. In accordance with the goals to be achieved by the company. In carrying out its work, the management audit has criteria including:
Criteria for Effectiveness and Efficiency
Effectiveness and efficiency are used as a standard to minimize risks that can occur. The effectiveness and efficiency of a company should be seen from the safety of the workers, how The company pays attention to its workers to increase effectiveness and efficiency wanted.
The Case as an Assertion of Action
Something that became a serious activity in this case, was caused by the company's lack of attention to the safety of employees so that inspection is needed by carrying out risk detection by means of supervision of the workers
Effect as an Assertion on the Results of an Action
By enforcing standards, it can reduce accidents for its workers and can also improve risks that could occur and problems with violations.
Thus has been explained about Definition of Management Audit, Purpose, Benefits, Stages, Scope, hopefully can add to your insight and knowledge. Thank you for visiting and don't forget to read other articles.
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