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CMA Final · Cost and Management Audit · Management Audit in Different Functions

In a management audit of the human resource function, which observation best indicates an effective manpower planning system?

Effective manpower planning derives staffing needs from approved business and production plans, compares them with existing skills, and closes the gaps through planned hiring and training. Ad hoc recruitment, rising headcount or timely payroll does not demonstrate systematic planning.

  1. ARecruitment is done whenever any manager feels short of staff
  2. BManpower requirements are derived from approved production and business plans, compared with current skills, and gaps are addressed through hiring and training plansCorrect
  3. CEmployee headcount has increased every year
  4. DSalaries are paid on the last working day of each month

Explanation

Effective manpower planning links staffing needs to business plans, assesses the existing skill base and plans for the gaps through recruitment and training. Rising headcount or timely salary payment does not show planning, and ad hoc hiring shows its absence.

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