The term management audit is commonly used for examination and appraisal of the efficiency and effectiveness of management in carrying out its activities. Areas of auditor interest include the nature and quality of management decisions, operating results achieved, and risks undertaken.

The management audit focuses on results, evaluating the effectiveness and suitability of controls by challenging underlying rules, procedures, and methods. Management audits, which are generally performed internally, are both compliance reviews and goals-and-effect analyses. When performed correctly, they are potentially the most useful of evaluation methods, because they result in change.

The management audit is a process of systematically examining, analyzing, and appraising management's overall performance. The appraisal is composed of ten categories, examined historically and in comparison with other organizations. The audit measures a company's quality of management relative to those of other companies in its particular industry, as well as the finest management...