Company owners use various types of management audit to be able to assess where their companies are headed, how efficient they are whether and the effectiveness of various strategies upon the growth, expansion and profitability of the company. In some cases this may be done by managers or accountants who are part of the company while in other cases one would hire a public accounting company instead. In most cases company owners go for public accounting companies though. Think of an audit as an analysis or review of the company- various factors ensure the profitability and success or failure of a company and the auditor merely judges what direction the company is headed towards in its current state. Your auditor would inform you of how you can improve your company’s efficiency by taking various factors of your company into account. Since various factors have to be taken into account there are different types of management audit.
The first of the various types of management audit is financial management audit. Usually a firm hires an accountant from within the company in order to keep information within the company. Hiring an external auditor could ruin the company’s reputation or rumors about the company’s financial status may begin and so, companies like to keep this information within the organization. In some cases the government may appoint a financial auditor to conduct such types of management audit to prevent an illiquid company from going bankrupt. These guys will tell company owners where they could make cuts; who they could hire or fire to do certain types of jobs; what they could sell or keep; what sorts of investments to make or avoid; whether or not financial fraud is taking place within the company; and they see whether there is proper segregation where duties of carious employees are concerned.
Of the main types of management audit there is also performance auditing. These auditors take the company’s workers’ responsibilities into account and see whether or not they are abiding by company rules. They also assess how many of them are contributing towards the success and profitability of the company and may recommend a bump up in the salaries of such workers and if workers are not hardworking or if they are not performing their duties the way they need to, the auditor may recommend the company’s employers to hire someone else and to let go of the particular worker.
Operational audit is another one of the many types of management audit that is carried out to assess the need for improving certain types of operations. If an operation isn’t required or is undesirable it may be downsized or eliminated, upon the auditor’s request, by the company.
An auditor’s main purpose is to help a company improve itself in various ways. Management audits are carried out periodically through the year to judge how well a company is doing and if there are certain obstacles, the audits bring these to the table and help come up with possible solutions to the obstacles.