CMA Final · Cost and Management Audit · Management Audit in Different Functions
A management auditor reviewing the human resource function of a manufacturing company observes: (i) attrition among skilled technicians is high, (ii) exit interviews are not analysed, (iii) the training budget is fully spent on one department. Which recommendation best addresses the root issue in a management audit?
The best recommendation is a training needs analysis linked to competency gaps and retention data, plus use of exit-interview findings in manpower planning. This addresses the lack of linkage among planning, training and retention, whereas uniform pay rises, budget cuts or changing the HR head do not remove the cause.
- AIntroduce a training needs analysis linked to competency gaps and retention data, and use exit-interview findings in manpower planningCorrect
- BIncrease salaries across all grades by a uniform percentage
- CReduce the training budget to cut cost since attrition is high
- DReplace the HR head without examining policies
Explanation
The three observations point to absent linkage between manpower planning, training and retention. A needs-based training plan and analysis of exit data tackle the cause. Uniform pay rises ignore the cause, cutting training worsens skill gaps, and replacing the head does not fix the system.
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