Efforts are done to bring out an overall improvement in management efficiency through review of all the objectives, policies, procedures and functions of management. Only a person having good knowledge and experience of management techniques may be appointed as Management Auditor.
Following are the main objectives of management audit −
Under this audit system, we have checking of every single original entry and their posting in ledger along with, balancing and totaling. This audit system is only advisable in small business units; in big business houses internal Auditor do this job and Auditor just check the effectiveness of internal control system of that organization.
Audit in depth means detailed stepwise verification of some specific transactions; this helps an Auditor to understand the complete procedure of transaction as adopted by the organization to carry out any transaction. For example, to check the purchase transaction, an Auditor will check the quotations, purchase orders (P.O.), material receipt note (M.R.N), goods/material inspection note, bin card and stock ledger.
Interim audit is done between two annual audits of an organization for a part of year. It enables the Board of Directors to declare interim dividend and also to determine interim figures of sales.