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PROJECT TOPIC- MANAGEMENT AUDIT – A TOOL FOR IMPROVING MANAGERIAL EFFICIENCY: [A STUDY OF ANAMBRA MANUFACTURING COMPANY LIMITED. EWGU]

 PROJECT TOPIC- MANAGEMENT AUDIT – A TOOL FOR IMPROVING MANAGERIAL EFFICIENCY: [A STUDY OF ANAMBRA MANUFACTURING COMPANY LIMITED. EWGU]

 

ABSTRACT

The economic climate of the country has put Nigeria industries a more diific~~slitt ilation than ever becore. Some have collapsetl,  are on the verge of collapsing while the fcw s~rrvivingo nes are oluating quite below installed capacity level. ‘rhe situation is so lcrrible that organization had to turn around and adopt survival slrategies performance evaluation methods) that will see them tlu-o~lgll this turbulent period.
Management audit happens to be one 01’ these strategies. And Ilavc even widely acclaimed by scholars and professionals in business nagcnl eanst the most desirable and ei’t’ective tool. i mpr-oved in performance, reduction of costs, increased profitability which condenses in the organi sat io~~lle adership or managemellt 1~111ctio1n. e. ability to plan, organise, direct staff and co-ordinate well as a birsiness survival sirategy of the company.
this, two types of perf’ori~~anceev altlatioi~ inetl~ocls, nalnely :
I . ‘Nontraditional performance appraisal and

2. Management-by-objective performance appraisals Vs inanageinent aitdit were selected, discussed aild analysed ~rsing Chi-square (x2)di stribution to test the research hypotheses, as it relates to ANAMMCO Ltd., Emene Enugir.
r – I he resists obtained were positive and in the a-ruminative, thi~s 111al;ing the reseal-cher to accept the hypothesis of the study and come to tlic conclusioo that Management audit actually results in economies of scale, increased ;profitability, increase the rate OF +?Dniester ~nn~lagemeoabt jectives and efficiency.

1 .O INTRODUCTION:

In practice, There are two types namely:
( 1 ) Traditional Perforinance appraisal
(2) Management-by-Objective Performance appraisals
For example, in appraising the lower level managers, majority of firins utilize traditional performance appraisal technique. A check- list and a rating system are designed, and the immediate supervisors make arbitrary assessments of performances. Though the upper level managers are conversant
with the concept of management – by- objectives (MBO) very ikw are actually using MBO in performance appraisals.
Secondly, the upper-level managers performance is also evaluated. For instance, when evaluating the performance of a district manager, the performance of the district is evaluated and this becomes the determinant of the evaluation of the manager. Furthermore, the evaluation of the performance of management as a whole, is usually based purely on an analysis of financial accounting data exclusively. One obvious reason for this occurrence is the lack of agreement on a reliable tool for the measurement of the performance of management, other than with the use of accounting data. Recently, many have contended that in order to appraise the value of management, calculations must be made in addition to those prepared for financial ratio analysis. It is this context that the management audit was begun.
Management audit therefore attempts to aid the management of the oganisation by providing it with information and analysis useful in the pro- -s of control. Management audit can also be significmt in financial re accounting area. For many years now, stockholders, financial analysts, potential investors, and other interested parties have been concerned with the annual reports of major corporations arid the attached letter from the president of the corporation. ‘ The concern has been that though a financial audit of the reco~cls of the company had been performed m.;l an opinion had been rendered, there was no additional method by which the outsider could evaluate the performance of management in addition to evduating the performance of tlie company. Accountants have been attempting to deal with this problem.
For stme years now and many proposals hnve bcen presented, of which the manageinent audit is the one that I think has the greatest potential for the factor .. For both internal and external reporting purposes, the alrdit must be performed by i n d~~x n d e netx aminers who are capable of apprai ;ing
performance both from accounting data and management analysis. If these appraisal were made and an opinion re-n-de red, the management audit would be significant benefit to internal and external parties alike.
The theory of the management audit parallels that of financial auditing – the purpose of the audit being the I. attestation of management’s representation by an independent examiner. By attestations, I refer to the creditability of management statements regarding its own Lcisions as proven by an independent third party. Management’s representation similar to those in financial accounting data are of two classes:
( 1 ) Information about management decisions that are disclosed to stockholders and the public and

PROJECT TOPIC- MANAGEMENT AUDIT – A TOOL FOR IMPROVING MANAGERIAL EFFICIENCY: [A STUDY OF ANAMBRA MANUFACTURING COMPANY LIMITED. EWGU]

 

(2) Information that management does not disclose. The auditing of financial statements examines the perforn~ance of the company for the fiscal period and holds the company accountable to the stockholders for its decisions. On the basis of the financial statements the stockholders are potential
investors who evaluate the performance of the company in financial terms (not profit, earnings per share, etc). Likewise the management audit is a way of evaluating the performance of management with regard to the decisions made, the efficiency of its operating, and the attainment of corporate goals. With the implementation of the management audit, the management of I. organisations would openly become more accountable for their actions to outside observers. Though the management audit can be implemented to vario~rse xtents, it would be a substantial aid to the evaluation and accoimtability of the management of organisations, government and business alike.
To this date, there has been ‘little empirical research to determine the potential value of the management audit to users or the willingness of management to be assessed in the public manner that the management audit purposes.
Ilowever, the management audit concept, if carefully designed could prove to be a most important development in the with a view to improving tended to investigate the extent to which management appraisal management efficiency.
This research is in field, management auditing is applied by organisations. In Nigeria for example, management perfol-mance evaluation, is done with a view to improving management efficiency. In an attempt to achieve this, the researcher delved into discussing management auditing, as a specialised aspect of auditing in general. It will go further to elucidate the importance of management auditing in an organisation, the extent 10 which it is utilised by organisations as a tool for improving managerial efficiency, the attendant problems and prospects. Finally the findings and observations will be highlighted and then recommendations on the need for fw-ther irivestigalions on increased use of management audit as an effeclive 1001 for improving managerial efficiency, made. ‘This research work involves, library work, consultation of published professional journals and periodicals, and field survey on the project topic.

1.1 BACKGROUND TO THE STUDY

The principal contribution of an audit is its identification of both strong and weak links in manpower management. Procedural audit, which is an examination and review of the ‘1. internal procedures and records of an organisation, in order to ascertain their reliability as a basis for the compilation of the final accounts and balance sheet. The importance now attached to investigating the effectiveness of the internal control of a business has caused a natural development for the need for management audit.
Management audit constitutes two major parts, namely:

(a) Management function auditing. This covers the evaluation of the fields of planning, organising, staffing, directing,
controlling and
(b) Management decision audit, which deals with the quality of decisions in the areas of long-range and company wide planning, marketing, operations, personnel, ac~ou~ntinagn d finance. If carefiilly designed they could prove to be most important development in the development appraisal field,
b with a view to improving managerial efficiency. IIowever, little is to be gained from the exercise of ‘. l~magelnenat udit, if nothing is done to change the situation. That is, i T the management is unwilling to, or does not recognise the need lo p!.~inge its viewpoints and policies and will permit little or
no change is current practice of the company.

1.2 BRIEF HISTORY AND BUSINESS Op ANAMMCO
1,l MITED

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