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

While auditing the marketing function of a consumer goods company, the management auditor wants to judge whether sales promotion spending is producing results. Which approach best serves this objective?

The auditor should compare incremental sales and contribution from each promotion campaign with its cost and the planned targets. Management audit judges effectiveness and efficiency of spending, whereas checking ledger postings, attendance or budget equality to last year does not show whether promotions achieved results.

  1. AVerifying that every promotion invoice has been correctly posted to the ledger
  2. BComparing incremental sales and contribution from each promotion campaign with its cost against the planned targetsCorrect
  3. CChecking that the sales team has signed the attendance register
  4. DConfirming that the promotion budget total equals the previous year's budget

Explanation

Management audit assesses effectiveness and efficiency, so the auditor relates the outcome (incremental sales and contribution) to the cost of each campaign and to targets. Ledger posting accuracy is a financial audit concern, attendance is routine compliance, and matching last year's budget says nothing about results.

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