MANAGEMENT AUDIT AS A TOOL FOR ACHIEVING ORGANIZATION OBJECTIVE (A CASE STUDY OF EMENITE LIMITED ENUGU).

MANAGEMENT AUDIT AS A TOOL FOR ACHIEVING ORGANIZATION OBJECTIVE (A CASE STUDY OF EMENITE LIMITED ENUGU).

ABSTRACT

In this study, researcher examined the management Audit. As tool for achieving organizational objectives. A case study of Emenite Company lit. The study is significance on system of management audit is intended not only to maintain an adequate method of processing accounting data, but also to safe guard the company against possible financial loss due to fraud or errors. With the, identification of the problems of the system, an attempt was made to device some solution to the problems.

The objectives of research includes:

1. To achieve the completeness, accuracy, and validity of recording of the transactions of the organization.


2. All income or revenue due to the company are received and recorded accurately in the book.


3. All assets are correctly recorded and adequate safeguard against loss, damaged or waste.

Relevant and related literature we re reviewed and influences drawn as to proof to a support of the hypothesis.

I also consulted a lot of books and journals as it was listed in page-tilted bibliography.

Data were collected by administration of questionnaires and conduction of oral interview.

The population of the study was made up 57 persons, as the population and sample size was 50 respondents. The application of YARO YAMANI formula was used to determine the above sample size. See the formula.

n =     N

1 + N (e) ²

 

some of the finding made includes:

1. The company is in the manufacturing sector. All the fifty respondents confirmed, it is 100%.


2. The company adopted, marketing policy for marketing department. This is done in order to enhance turnover and increase productivity.

And finally, recommendation.

1. The organization controlling functions of management should be properly recognized and regular appraisal made to discover the loopholes and remove the logs which date the progress of the company.


2. Internal audit department” power and duties should be observed critically to facilitate effectiveness.

CHAPTER ONE

INTRODUCTION

• STATEMENT OF PROBLEM


• OBJECTIVE OF STUDY


• SIGNIFICANT OF STUDY


• STATEMENT OF HYPOOTHESIS


• LIMITATIONS AND SCOPE OF THE STUDY


• DEFINITION OF TERMS

 

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1     DEFINITION OF MANAGEMENT AUDIT

2.2     SCOPE OF MANAGEMENT AUDIT

• AUDIT PERSONNEL/AUDIT STANDARDS


• PURPOSE OF MANAGEMENT AUDIT


• FUNCTIONS OF MANAGEMENT AUDIT


• PLANNING AND CONTROLLING THE AUDIT


• MANAGEMENT TECHNIQUES.

 

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

• SOURCES OF DATA


• INTERVIEW QUESTION


• METHOD OF INVESTIGATION


• POPULATION


• DETERMINATION OF SAMPLE SIZE

 

CHAPTER FOUR

DATA PRESENTATION AND FINDINGS

• DATA PRESENTATION AND FINDINGS


• TEST OF HYPOTHESIS

 

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION, RECOMMENDATION

• FINDINGS


• CONCLUSION


• RECOMMENDATION

BIBLIOGRAPHY

APPENDIX

QUESTIONNAIRE

 

CHAPTER ONE

INTRODUCTION

Auditing is the independent examination of financial statement of an organization with a view of expressing an opinion as to know whether those statements give a true and fair view and complies with the relevant status. This opinion is expressed in the form of a report. The person carrying out such an examination is known as an auditor. The auditor has not reviewed the financial statement only, he also carried out a skillful and careful examination of the records of the organization in order to ensure that the financial statement are a reflection of the affairs of the organization as appeared in those records.

It is important to appreciate that for any procedure to quality as a part of the system of management audit, it must be established or at least approved by management. Hence, it is at part of the auditor to establish the system of management audit. Whenever, the auditor is involved in the establishment of audit management, heactys only in an advising capacity. Therefore, the duties of prevention and detection of frauds and errors are primarily the responsibility of management and has not form parts of the statutory responsibility of the auditors.

Naturally, there are two types of performance. The managers and the upper level managers performance. The managers in the other hand are the joint of most audit firms (controller of the resources of the organization). They are engage in the planning. Controlling reviewing and at times, the direct supervision of both individual engagement and a group of audit management or engagement simultaneously. The thorough completion of the audit work and adherences of laid down standards are the primary responsibilities of the manager. We also have different categories of managers but with similar function E.g. principle managers, senior managers deputy managers and assistant managers with varying degrees of experience.

In order to prevent friction and ensure the smooth  running of the organization, there should a clear structure of authority defining the responsibilities of each official or department special duties should be assigned to staff with the relevant skill and performance. To prevent bottleneck in the procedures a definite arrangement should be made for staff to take their annual vocation to replace those who are absent. It is in thee process and context that management audit starts.

 

1.1     STATEMENT OF PROBLEMS.

The importance of an audit in management cannot be over emphasized. It assists in the relation of both strength and weakness in manpower management. The scructinisation and review of the internal procedure and records of an organization so as to test the reliability and credibility as a foundation for the computation of final accounts and balance sheets.

1. Management audit constitutes two major part viz..


2. Management functions auditing which covers the appraisal of the area of planning organization, staffing, directing and controlling.

• Decision of management in the fields of long range and organization, wide planning, marketing operations, personnel, accounting and finance, if carefully designed, could prove the most important development appraisal filed with a view to improving management efficiency. Despite the merits obtained for management audits, by organization there are some problems hampering the  achieving of organizational goals UK management audit.

The following problems includes:

1. To what extent has the aims of the organization been efficiency and achieved.


2. How can the company determine the degree of efficiency, effectively and economy in the operations of the service.

• Evaluation of activities of “line” managers and supervisors in the execution of accepted policies.

1. To what degree can the staff confirm with the established standard.

 

1.2     OBJECTIVE SO FSTUDY.

In the system of management audit is intended not only to maintain an adequate method of processing accounting data, but also to safe guard the company against possible financial loss due to fraud or errors. There is also the overriding need on the part of the management to ran the business in an  orderly manner. Most management decisions are based on financial quantitative and qualitative information obtained from the record of the business for best decision, therefore, the information must be relevant, timely and accurate. Hence, the immediate objective of management audit is to achieve the completeness, accuracy and validity of recording the transactions of the organization. As a test, the management audit achieves the following objectives.

1. All income or revenue due to the company are receive and recorded accurately in the book.


2. All expenditure incurred by the company is correctly recorded and payment properly authorized.


3. All assets are correctly recorded and adequate safeguard against loss, damage or waste.


4. All liabilities are recognizing, correctly recorded and adequate provision made for known and anticipated losses.

The system of management differs from establishment tot eh other. The system to the adopted by an organization will depend on the peculiar circumstances of the management, and the requirement of the organization. There are however, some general principles and recognizable features hat are essential for good system of internal management. Some of these features relates to the basic controls while others relates to the disciplines over degree of effectiveness of and decision marking.

 

1.3    SIGNIFICANT OF THE STUDY

The appraisal of the management performance has been usually based on an analysis of financial accounting data. More so, there is lack of agreements on a reliable tool for the appraisal of the management performance and level of efficiency.

This study therefore, may be of special important to the following interest groups who may find the research beneficial.

1. The management itself, who make the organization decision and guidelines.


2. It is of great significant tot the shareholder and various prospective investors.

iii.     It assists the financial analysis.

1. The populaces who have the right and interest on the activities of any such organization can also find the study beneficial


2. it is also important to those interested parties both internal and external.


3. It is also important to the researcher.

• For the interest of the management, staff and the economy of the country at large.

And finally, the research findings would also enable the readers to achieve more experience based on management audit as an effective tool of achieving management decision.

 

1.4    STATEMENT OF HYPOTHESIS

The research hypothesis is made up to test the  correctness and reality of the question(s) contained in management audit as a today for achieving organizational objectives. The following hypothesis has been formulated based on the statement of the problem and the objectives of the study in order to guild the study.

 

HYPOTHESIS 2

Ho:   The Company has no good plan formulation, which highlights the strength and weakness of the company.

Hi:    The company has good plan formulation, which highlights the strength and weakness of the company.

 

1.5     LIMITATIONS AND SCOPE OF THE STUDY:

The research on the study was not an easy one were some setbacks, which I encountered in the course of carrying out this research work.  They include.

1. Problems of time, which militate against the effective execution of this study was inadequate of time.


2. There was the problem of audit materials, which must affect on the financial statement.

• The staff of the organization is not co-operative, adequate information and details could not be obtained.

1. High cost of literature on the management audit as a special feature of the general audit or financial audit of an organization despite, the odds, and the above shortcomings the researcher worked hard and laboured hopefully to the end of this work.

Also, on the research carried out, the auditor according to the scope of the study does not review the financial statement only, he also carried out a skillful and careful examinations of the records of the organization to ensure that the financial statement is a reflection of the affairs of the organization as appeared in those records.

The researcher as in  the test carried out  the management audit achieved the following objective, all expenditure incurred by the company are correctly recorded and payment properly authorized.

 

1.6    DEFINITION OF TERMS

1. Appraisal- (often called performance appraisal). Is the process during which the progress performance, results (and sometimes personality) of an employee are reviewed and assessed by his immediate superior and in many instances by other senior managers.


2. Financial statement: The preparation of financial statement is a necessary part of every business no matter what the form of ownership or the type of business activity. Because these statement show the financial status and progress of company. They are of interest to managers, owners, the leaders, the employees and those are interested and have concern for the business.


3. Investment: This includes stock and bonds of other companies, or other property that the company has purchased with the expectation of a financial return.


4. Investors: They are prospective businessmen that are financially, balance with the intention to promote financial ability of a company.


5. Management Audit: A management audit is usually a subjective comparison of a rather detailed breakdown of the responsibilities of management with actual performance or with company policy in regard to each item.

 

 

 

REFERENCES

Daniel Fuans Supervisory Management. Principles and Practices 2^nd Edition                       From Page 286-287.

Tilley K.W. Leadership and Management Appraisal London. The English                                      Universities Press Limited From Pp. 152-154.

Harold T. Amrine, John A. Ritchey and Oliver S. Hiukey.

Manufacturing Organization and Management 3^rd edition Page From 547, 546, 487.

Osita Aguola  FCA Fundamentals of Auditing Page 159,28,39.

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