Management Audit Bcom Notes
Management Audit Bcom Notes:- In this post, I am giving you the notes of Bcom 3rd Year auditing, which is going to be very useful in your examination and you should share this post to all friends and all your groups so that your friends also read this post. Could. Management Audit Bcom Notes
Management audit is a new development in the field of auditing. It was first used in the United States of America. It is a tool of management Control.
Meaning and Definitions of Management Audit
Management audit is an application of audit procedures and matters to the sphere of management. Management audit is the appraisal of the duties and performances of the management. It is essentially, a review of performances of various managers.
Management audit measures the various inputs the manager uses and their outcome i.e., the output in terms of quantity, return or achievement of fixed targets. It is concerned with the actual performance with the pre-determined targets.
According to T. G. Tokhe, “The management audit is a comprehensive critical review of all aspects or processes of management.”
Conclusion: Thus, management audit is an examination, investigation and evaluation of the managerial functions, policies and actions. It is to find out as to how far the managerial decisions and actions have led to the achievement of the pre-determined targets.
Objectives of Management Audit
Some of the important objectives of Management Audit are as follows:
- To streamline the managerial services according to the requirements of the business and achieve efficiency in the management.
- To obtain first hand information and knowledge of operating characteristics and problems of each functional area so as to have most efficient administration of the operations.
- To review the methods used in managerial services and suggest remedies for improvement to attain efficiency in managerial services.
- To pinpoint deficiencies and defects in functional areas, thinks of an effective policy and thus aids or helps the management for better performance.
- To enable the management to find out how far certain decisions of management have jeopardized the individual managerial decisions.
6.To aid management in discharge of their duties at all levels more effectively and efficiently.
Difference between Management Audit and
Compulsory tax audit U/S 44AB
According to Sec. 44AB, tax audit is compulsory for a person carrying on any business or profession:
(1) If in the case of a business, its total sales, turnover or gross receipts in the previous year exceeds Rs. 1 crore.
(2) If in the case of a profession, its gross professional receipts in the previous year exceeds Rs. 25 lakhs.
(3) If in the case of a business, profits are determined on presumptive basis under Sec. 44 AD, 44AE and 44AF, and in each case the assessee claims that his profits to be lower than as provided.