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Explain How Management Audit Serves as an Effective Technique of Controlling. - CBSE (Commerce) Class 12 - Business Studies

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Question

Explain how management audit serves as an effective
technique of controlling.

Solution

Management audit refers to the extensive and constructive appraisal of the overall performance of the management of an organisation. It aims at improving the overall effectiveness and efficiency of the management. It evaluates all the functions performed by the managers and helps in identifying the deficiencies in the work performance. The effectiveness of management audit for controlling can be judged from the following points. 

i. Identification of Deficiencies: Management audit helps in recognising the current as well as probable deficiencies in the performances. Thereby, it helps in taking the necessary corrective measures. 

ii. Improves Efficiency: Through management audit, various activities of the management can be continuously monitored. Thereby, it helps in improving the overall efficiency of the management. 

iii. Enhances Coordination: It improves the coordination between employees as well as within the different functions of the organisation as it continuously oversees the work.

iv. Adapting to Environmental Changes: It helps the organisation to adapt to the environmental changes appropriately. This is done by ensuring that the managerial policies and strategies are up-to-date.

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Solution Explain How Management Audit Serves as an Effective Technique of Controlling. Concept: Management Audit.
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