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

Which of the following is the primary focus of a management auditor when reviewing the finance function, as distinct from a statutory financial auditor?

A management auditor reviewing finance focuses on how effective financial planning, working capital management and fund-raising decisions are against organisational objectives. Giving a true and fair opinion and checking ledger accuracy are the statutory financial auditor's concerns, while cost records compliance falls under cost audit.

  1. AVerifying that the balance sheet shows a true and fair view
  2. BEvaluating the effectiveness of financial planning, working capital management and fund-raising decisions against objectivesCorrect
  3. CCertifying compliance with the cost accounting records rules
  4. DDetecting arithmetical errors in the ledger

Explanation

Management audit assesses the effectiveness and efficiency of managerial decisions such as planning, working capital and funding. True and fair opinion and ledger accuracy are financial audit tasks, and cost records compliance belongs to cost audit.

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