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Question:

Explain how management audit serves as an effective technique of controlling.

Answer:

Management audit refers to systematic appraisal of the overall performance of the management of an organisation. The purpose is to review the efficiency and effectiveness of management and to improve its performance in future periods. It is helpful in identifying the deficiencies in the performance of management functions. The effectiveness of management audit for controlling can be judged from the following points:

  1. It helps to locate present and potential deficiencies in the performance of management functions.
  2. It helps to improve the control system of an organisation by continuously monitoring the performance of management. 
  3. It improves coordination in the functioning of various departments so that they work together effectively towards the achievement of organisational objectives.
  4. It ensures updating of existing managerial policies and strategies in the light of environmental changes.


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