1.0 INTRODUCTION
In practice, there are two types of performance appraisal. For instance, in appraising the lower level managers, majority of firms utilizes traditional performance appraised technique. A check list and rating system were designed, and the immediate supervisors make arbitrary assessments of performance though the upper level managers are conversant with the concept of management by objectives. Secondly, the upper level manager’s performance is also evaluated. For example, when evaluating the performance of a district manager, say, the performance of the district is evaluated and this becomes the determinant of the evaluation of the manager. Furthermore, the evaluation of 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 measurement of 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 prepare for financial ratio analysis. It is in the context that the management audit stated.
1.1 BACKGROUND OF STUDY
Management audit attempted to aid that management of the organization by providing it with information and analysis useful in the process of control. Management audit can also be significant in financial accounting area. For many years now, stockholders, financial analysts, potential investors and other interested parties have been concerned with the annual reports of major co-operations and the attached letter from the president of the corporation. The concern has been that though a financial audit of records of the company has been performed and an opinion had been rendered, there was no additional method by which the outsider could evacuate the performance of management in addition to evaluating the performance of the company. Accountants have been attempting to deal with this problem for some years now and many proposals have been presented of which management audit is the one that I think that has the greatest potential for the future. For both internal and external reporting purposes, who are capable of appraising performance both for accounting data and management analysis. If this appraisal were made and an opinion rendered, the management audit would be of significant benefit to internal and external parties alike. The theory of management audit parallels that of financial auditing. The purpose of the audit is being the attestation of management’s representation by an independent examiner. By attestation, I refer to the reliability of management statement regarding it’s own decision as proven by an independent third party.
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