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

A management auditor reviews whether the organisation's stated objectives are clear, measurable and consistent with the policies and plans framed to achieve them. This review relates most directly to which element of the management audit?

This review is an evaluation of the planning and objective-setting function. Management audit tests whether objectives are clear, measurable and aligned with policies and plans. Cash verification, inventory counting and vouching are transaction-level financial audit procedures and do not assess managerial planning quality.

  1. AEvaluation of the planning and objective-setting functionCorrect
  2. BVerification of cash balances on the balance sheet date
  3. CPhysical verification of inventory
  4. DVouching of purchase invoices

Explanation

Checking clarity and consistency of objectives, policies and plans is an appraisal of the planning function, a core area of management audit. The remaining options are routine financial audit procedures, not assessments of managerial planning.

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