Management Audit As A Tool Of Achieving Organisational Objectives

1.0 INTRODUCTION
In practice, there are two types of performance appraisal for instance, in appraising the lower level mangers, majority of firms utilizes traditional performance appraisal technique. A check list and rating system were designed, and the immediate supervisors make arbitrary assessments of performance though the upper level mangers are conversant with the concept of management by objectives.
Secondly, the upper level manager’s performance is also evaluated.
For example, when evaluating the performance of a district manger, say the performance of the districted is evaluation and this becomes the determinant of the evaluation of the manger. Furthermore, the evaluation performance of management as a whole is usually based purely on an analysis of financial accounting data exclusively.
One obvious reason for this occurrence is the lack of
agreement on a reliably tool for measurement of performance of management other than with the use of accounting data.
Recently, many have contended that in order to appraise the value of management, calculations must be made in addition to those prepare for financial ratio analysis.
It is in the context that the management audit started.

1.1 BACKGROUND OF THE STUDY
Management audit attempted to aid he management of the organisation by providing it with information and analysis useful in the process of control. Management audit can also be significant in financial accounting area. for many years now, stockholders, financial analysts, potential investors and other interested parties have been concerned with the annual reports of major co-operations and the attached letter form the president of the corporation. The concern has been that though a financial audit of records of the company has been performed and an pinion had been rendered, there was no additional method by with the outsider could evacuate the performance of management in addition to evaluating the performance of the company.
Accountants have been attempting to deal with the problem for some years now and many proposals have been presented of which management audit is the one that I think that has the greatest potential for the future. For both internal and external reporting for the future. For both internal and external reporting purposes, who are capable of appraising performance both for accounting data and management analysis.
If this appraisal were made and an opinion rendered, the management audit would be of significant benefit to internal and external parties alike.
The theory of management audit parallels that of financial auditing.
The purpose of the audit is being the attestation of management’s representations by an independent examiner.
By attestation, I refer tot he reliability of management statements regarding its own decisions as proven by an independent third party.
The auditor’s financial statement examines the performance of the company accountable to the stockholders for its decisions. on the basis of the financial statement, the shareholders or potential investors, evaluate the performance of the company in financial terms, net profits, earning per share etc.
Likewise, the management audit is a way of evaluating the performance of management in regard tot he decisions made, the efficiency of its operating and the attainment of corporate goals. With the implementation of the management audit, the management of organizations would openly became more accountable for their actions to outside observers. Though the management audit can be implemented to various extent, it would be a substantial aid tot he evaluation and accountability of the management of organizations, governments and business alike.
To this date, there has been little empirical research to determine the potential value of the management audit to users of the willingness of management audit process.
However, the management audit concept, if carefully designed could prove to be a most important development in the management appraisal field, with a view to improving management efficiency.
This research is intended to investigate the extend to which management auditing is applied by organizations in Nigeria for example, in management performance evaluation, with a view to improving management efficiency. In an attempt to achieve this, delve into discussing management auditing as a specializing aspect of auditing in general. It will go further to explain the important of management audit in an organization, the extent to which it is utilized by organization as a tool of improving management efficiency made.
This research involves, library work, consultation of published professional journals, and periodicals, and field survey on the project topic.
This work started with introduction followed by brief definition of some of the important terms the nature and scope of management audit, presentation of research findings, problem and prospects, recommendations, summary and conclusion.

1.2 SIGNIFICANCE OF STUDY
Hitherto, the evaluation of the management performance, has been usually based on an analysis of financial accounting data. Furthermore, there is lack of agreement on a reliable tool for the evaluation of the management performance and the level of efficiency.
This study therefore, may be of special importance in the following interest groups who may find the research beneficial:
1. The management itself, who make the organisation decisions and policies.
2. The stockholders and other interested potential investor
3. Financial analysis.
4. For the management, staff and the country’s economy as a whole.
For interested parties both internal and external.
5. The general public who have right to be informed of the activities of any such organisation.
Implementation of the research findings would help in recognizing more, and appalling management audit as a very effective tool for improving management efficiency.

1.3 SCOPE AND LIMITATION OF THE STUDY
This research work is designed to cover all issues involved in management audit, which is grouped under two broad areas, namely:
1. Management function auditing, which entails evaluation of the fields of planning, organizing, staffing, directing and controlling.
2. Management decision audit dealing with the quality of decisions in the areas of corporate and long range planning marketing, operations, personnel, accounting and finance.
The analysis was done on individual organisations basis and the results compared to arrive at the ultimate opinion of the researcher. A public limited liability company, whose legal and financial status affords the capacity and awareness of the derivable benefits from embarking upon the management audit exercise, is used as case study.
Furthermore, some limitations and delimitations occur while carrying out this research work.
Time factor was the major limiting factor to this research work as lectures were still on at the time most of this research work was being conducted.
This project started from (1970 – 2003) (33) years.
Time management and apportion become problematic as case study.
Another limitation was high cost of literature on the “Management Audit” as a specialized aspect of the general audit or financial audit of an organisation .
Despite the above set back, the researcher laboured hopefully to the end of this work.

1.4 PURPOSE OF STUDY
In some organization, management at times see no good reason for bothering with an audit of management itself. Such organizations management may feel that the staff is doing best, so that an audit can’t help.
In some cases suggestions that the management audit be performed regularly would be regarded as insulting by those in charge. Infact, some mangers, top, middle and low, have been out spoken against all attempts to evaluate their activities and those of their fellow staff members. They have insisted that such appraised implies a lack of faith on the part of interested parties , internal and external is an insult to their professional competence.
The above views cannot be justifies today as auditing of financial phase a business or agency.
Management audit does not imply suspicion that the controller or the accounting division, or even the management is guilty of misrepresentation malpractice, or inefficiency.
The objective of this study is to highlight or emphasized the ideal that on the contrary, these review are undertaken necessary because much may be gained from over all review. The strength as well as weakness may be noted. The need for added activity and support can be identified. Mistakes may be noted and deficiencies recognized, and steps taken to remove them, in order to ensure improved management effectiveness and efficiency.
Infact, the management is aimed at showing that part from the traditional interpretation and analysis of financial ratios, as a method of evaluating the performance of management, a comprehensive and detailed management audit, stands a better chance to influence an improved management efficiency.

THE PURPOSE OF THIS STUDY ARE THEREFORE:
1. To investigate into the issues involved in the management audit.
2. To determine the extent to which the issues mentioned in (1) above are applied in evaluating the management efficiency in any organization.
3. To analyze the degree of effectiveness of using the management audit s a tool for improving management efficiency.

1.5 HYPOTHESIS
a. If organisation regularly carry out well planned and adequately executed management audit, the effectiveness of using it as a tool for improving management efficiency will be made manifest (Hi).
b. If organizations regularly carry out well planned and adequately executed management audit, the effectiveness of using it as a tool for improving management efficiency will not be made manifest (Ho).

1.6 DEFINITION OF TERMS
1. Appraisal: – it means to estimate the value or quantity of the management audit. In essence it refers to the estimation of value or quantity of job.
2. Arbitrary: – This is the reaching a decision based on opinion or impulse only and not on reason.
3. Investors: – They are prospective business that are financial balanced with the intension to promote financial ability of a company.
4. Financial Statement:- This refers to annual balance sheet or statement of affairs of an organization.
5. Management Audit: – It is also known as operations audit, serves as a yardstick for measuring the ability of the management and also to determine the objectives of the orgnaisation.