CMA Final · Cost and Management Audit · Basics of Management Audit
In management audit, the term 'management' being evaluated primarily refers to which of the following?
Management audit evaluates the people and processes that plan, direct and control an organisation's resources to achieve its objectives. It looks at managerial effectiveness across levels, not just statutory auditors, workers or regulators, so the correct option is the one describing the planning, directing and controlling group.
- AOnly the statutory auditors appointed by shareholders
- BThe group of people who plan, direct and control the organisation's resources to achieve objectivesCorrect
- COnly the lowest tier of operational workers
- DOnly the government regulators overseeing the entity
Explanation
Management audit examines how those who plan, organise, direct and control resources perform in achieving organisational objectives. It is not confined to auditors, workers or regulators, so the other options describe the wrong subject of the audit.
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