Management Audit | Objectives of Management Audit

A management audit is a special audit conducted on an organization. This type of audit is conducted on behalf of investors. This audit assesses the management team's performance. It is generally a confidential review to identify mismanagement.

Management auditing is an ongoing activity. It will involve different types of audits. These types are, for example, internal audit, external audit, and special audit. These audits will help investors to ensure that their investments are secure.

Management Audit

A management audit is different from a financial audit. This type of audit is conducted to verify how well the organization is managing its financial position. A financial audit is a step in the internal management audit.

What are the objectives of the management audit?

A management audit usually has a set of objectives, such as:

  • Assess the impact of decisions on the business

  • Analyze the potential of the organization

  • Assess the effectiveness of the business

  • Assess the impact of decisions on the community

What does the manager take out of the management audit?

Management auditors will come up with suggestions and recommendations based on the manager's actions. Some managers want to be criticized. Others want to be praised. Both have their good sides and their bad sides.

The manager who wants to be criticized in his mind is the kind of manager who will be reluctant to make any radical changes. The manager who wants to be praised wants to be praised by management auditors and the management board.


Managers get no reward or recognition for cleaning their house. The only way that an executive will get credit is by way of failures. In some situations, the failures will be due to chance, but most failures, especially bad ones, are caused by the director or manager's ignorance, incompetence, or selfishness. An executive's highest reward and success will always be that of total dedication to their chosen cause. No matter what they need or desire.

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