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

Which of the following is the most appropriate starting step in planning a management audit assignment?

The first step is defining the audit objectives and scope and understanding the organisation, its goals and environment. Only after this groundwork can the auditor gather evidence, evaluate performance, report findings and recommend improvements, which belong to later stages.

  1. AIssuing the final report to the board
  2. BDefining the audit objectives and scope and gaining an understanding of the organisation, its goals and environmentCorrect
  3. CRecommending corrective actions to department heads
  4. DClosing the audit file after follow-up

Explanation

Planning begins with clarifying objectives and scope and understanding the organisation and its environment. Reporting, recommending actions and follow-up come later in the audit cycle, so options A, C and D are premature as starting steps.

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