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CMA Final · Cost and Management Audit · Basics of Management Audit

A management auditor reviewing a manufacturing company finds that departmental targets are met, yet the company's overall strategic objectives are being missed because departments pursue conflicting goals. Which aspect of management audit does this finding mainly relate to?

The finding relates to evaluating goal congruence and coordination in planning and organisation. Management audit assesses whether departmental objectives align with overall corporate strategy; conflicting departmental goals show weak coordination even when individual targets are achieved.

  1. AVerification of statutory registers
  2. BEvaluation of goal congruence and coordination in the organisation structure and planningCorrect
  3. CDetection of arithmetical errors in cost sheets
  4. DChecking the physical existence of fixed assets

Explanation

Departments achieving local targets while organisational objectives fail indicates weak goal congruence and coordination. Management audit examines planning, organisation and control for such alignment. Options C and D are routine financial or cost verification tasks and do not address this issue.

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