Management audit is a systematic assessment of methods of an organization management in the administration and the use of resources, tactical and

strategic planning and employees for the purpose of organization improvement. It is the critique given on a policies and procedures in operation, future plans, previous trend, discharge of fiduciary responsibility, responsiveness to stakeholders as well as interests and use of resources and opportunity available to the enterprise. An objective of the management audit is to establish the current level of effectiveness, suggest improvements as well as lay down standard for the future performance. Management auditors both employees of the company and independent consultants do not appraise individual performance, but may critically evaluate the senior executives as a management team. Key issues in the topic (a) Objectives of management audit Appraisal objectives and plans When an auditor evaluating objectives of the company he or she may determining whether the objectives and clear and understandable, reasonable and properly reflect companys responsibilities to stakeholders, are sufficient communicated to the proper operating personnel and vouch that objectives are not being changed so frequently that will lead to confusion and frustration. Appraisal of clients organization structures Organization structure in the company is of more important since it include assignment of duties and responsibilities as well as delegation of authority in sub-units of the company. An auditor should want to vouch if the organization structure is in harmony with the objectives of the company, divisions, department or unit. The structure provides reasonable spans of management and if the structure provides unit of comment. Evaluation and assessment of clients performance An auditor will be concerned with performance by applying quantitative measures to obtain quality such as effectiveness, efficiency and economy of the work done.

(i) Cost This is the among better measurement of companys performance. Always companys expectation is to use less costs and getting high profit. In examine costs, an auditor may ask if the trend is up or down and why so? Appraisal of control Appraisal control deals with administrative controls exercised over all phases of the business, and its purpose is to determine whether controls provided are adequate and is providing effective in accomplishing management objectives or plan of operation. The auditor is interested in making sure that the established controls are in conformity with the objectives and plans of the company. (a) Corporate analysis The auditor should analyze the clients overall business strategy, this can be achieved by analyzing industrial situation, environmental, strength, weakness, opportunities and threats analysis (SWOT) (i) Industrial analysis An auditor should examine competition in the industry, bargaining power of clients suppliers, bargaining power of buyers, threats of new entrants and threat of substitutes. With the view of determine the level of competitive rivalry with competitors. (ii) Environmental analysis The auditor should examine client policy of responsiveness to the political, economical, social and technological situation (PEST) existing at present, for example social environment examines price sensitivity, product taste, branding and relationship of clients with the local society and at the natural and global level. Both SWOT and PEST factors play a great role in the company since when for example when a company fail to utilize and also things like environmental factors,

may have direct impact in company, for example when company produces harmful products may lead to caries and other penalties.

(b) Plan for management audit Plans for management audit include two approaches namely organizational and functional Organizational approaches, the auditor examines the administration of the organization itself, he or she will be interested in the structure, budgets and the like. The auditors area of concentration will be in problems of administration and how he or she can provide assistance to the department manager. Under functional approach, the auditor area of concentration will be on major activities from start to end. The auditor traces the function through all units involved with them and is less concerned with general administrative activities within the units then with their effort upon the functions under review. Where the function is significant enough his or her overview can be of great assistance to general management. (c) Steps in management audit There are main four steps in management audit, which are (i) Familiarization, an audit must learn from operating management. What the objectives of operating are, how they are to be accomplished, and how the results are determined. The audit will discuss the operation with knowledgeable people, the auditor will want to know how management determines whether the activity is functioning correctly, how it report results, how it evaluating employees and the like. (ii) Verification, by verification of transactions, the auditor is able to determine the degree of which control is an actual operation conform to the written and oral descriptions and understandings which management has given to the auditor

(iii)

Evaluation and recommendation, evaluation takes place during familiarization on whether the activity is well controlled or not. Through verification, audit test may disclose conditions that were not apparent from the initial survey.

(iv)

Reporting, after evaluation an auditor should write report to the management of what has been obtained

Application of topic in Tanzania environment (a)Many companies in Tanzania sets objectives and plans in order to archive their goals, no company which operate without objectives and plans (b)Corporate analysis is important in Tanzanian environment and always applicable in order to achieve their objectives and goal, for example environmental cares, support of sports and games by large companies maintain their assurance on market ad creation of the goodwill to the society. (c) Methods of controls help to ensure firms activities conform to its plan and that its objectives are achieved. Some Tanzanian entities applies controls to meet their objectives, example of controls are action control or behavioral controls in working area, results or output control. Challenges on the application of topic The major disadvantages of results control is that, in many cases the results required can only be partially specified, also there can be difficult in separating controllable and uncontrollable factors. Objectives and goals of the company may become difficult in Tanzania environment especially where there is bad or poor leadership which fail to organize sub units of the company as whole.

Another challenge is that, corporate analysis is mainly achieved by large companies like Vodacom and TBL but for small or growing company it becomes difficult due to the small capital and other issues

BIBLIOGRAPHY Louwers et al (2008), Auditing and Assurance Services, fourth edition, McGraw Hill, New York. Drury C (2004), Management and Cost Accounting, sixth edition, Thomson Learning, London. Lucey T (2003), Management Accounting, fith edition, Thomson Learning.