This research work is conducted as part of the requirement for the award of a Higher National Diploma (HND) in financial studies (Accounting).

It highlights the authors effort in finding out the ways which management audit is used as a tool of achieving organizational objectives in our everyday organizations organizational objectives

The entire work is divided into five chapters, chapter one is an introductory analysis of the topic, then the background of the study, significance, scope and limitation, the purpose and hypothesis organizational objectives

The second chapter i.e chapter two dealt with the Literature Review and Theoretical consideration.  Here related past works were reviews and the theoretical consideration on the present study was also brought into focus.  As well as scope and nature of management audit and the result of auditing management.

Then, chapter three contains an explanation of how and where the needed information for the study was obtained and how the sample size was determined and the limitations encountered in the course of conducting the research.  It also contains the method of investigation.

Chapter four dealt with the presentation and analysis of data collected during the field survey, after which the postulated hypotheses were tested.

Lastly, chapter five makes up the summary, conclusion and recommendations.







In practice, there are two types of performance appraisal for instance, in appraising the lower level managers, majority of firms, utilized traditional performance appraisal technique.  A check list and rating system were designed and the immediate supervisors make arbitrary assessments of performance though, the upper level management by objectives.

Secondly, the upper level managers performance is also evaluated.  For example, when evaluating the performance of a district manager, say the performance of the district is evaluated and this because the determinant of the evaluation of the manager.  Furthermore, the evaluation performance of management as a whole is usually based purely on an analysis, a financial accounting data exclusively.

One obvious reason for this occurrence is the lack of agreement on a reliable tools for measurement of performance of management other than with 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 in the context that management audit started as organizational objectives


Management audit attempted to aid the management of the organization by providing it with information and analysis useful in the process of controlling organizational objectives

According to Eze J. C. (2001) Management audit is an audit that evaluates the efficiency of management at all levels throughout an organization with a view to recommend improvement in areas where effectiveness is not assured.  Management audit can also be significant in financial accounting area.  For many years now, stockholders, financial analysis, 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 opinion had been rendered.  There was no additional method with the outsider could evaluate the performance of management in addition to evaluating the performance of the company.  The theory of management audit parallels that of financial audit.  The purpose of the audit is being the attestation of management’s representations by an independent examiner.

By attestation I refer to the reliability of management statement regarding its own decisions as proven by an independent third party.  The auditor’s financial statement examines the performance of the company accountable to the stockholders of its decisions.  On the basis of the financial statement, the shareholders or potential investors, evaluate the performance of the company in financial terms, net profit, earning per share etc.

Likewise, the management audit is a way of evaluating the performance of management in 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 organizations would openly become more accountable for their actions to outside observers organizational objectives.

To this date, there has been little empirical research to determine the potential value of the management audit to users of the willingness of management audit process.  However, the management audit concept, if carefully designed will prove to be a most important development in the management appraisal field, with a view to improving management efficiency.  This research is intended to investigate the extend to which management audit is applied by organizations in Nigeria for example, in management performance evaluation, with a view to achieve this, delve into discussing management audit as a specialize aspect of audit in general.  It will go further to explain the important of management audit in an organisation, the extent to which it is utilized by organization as a tool of improving management efficiency made.  This research involves, library work, consultation of published professional journals, and periodicals, field survey on the project topic organizational objectives

This work started with introduction followed by brief definition of some of the important terms the nature and scope of management audit, presentation of research findings, problem, prospects, recommendations, summary and conclusion.



There are so many problems which affect management Audit in the organizations inspite, other related problem of this study are those caused by poor management control system, inadequate Training and Re-Training, Bad management, staff negligence, inadequate knowledge and experience of staff, security arrangement and use of sophisticated accounting machines and also poor remuneration.

A part from these, when appropriate recognition is not recorded to the Management Audit department the status of the head of the department is always lower and therefore inferior to the states of the Head of Department.  Heads of other Department regard the head of management audit department’s subordinate offer in power.



Objectives of the study include:

  1. To ascertain if management audit assist the organization in achieving its objectives.
  2. To ascertain if there exist co-operation between management auditors and external auditors.
  3. To find out if management audit assists in the detection and prevention of fraud in the organization.


  1. Does management audit assist the organization in achieving its objectives?
  2. Does co-operation exist between the management auditors and external auditors?
  3. Does management audit assist in the detection and prevention of pilferage and fraud?




  • H0: There is no relationship between management audit and organization.
  • H1: There is a relationship between management audit and organization.


  • H0: management audit does not assist in the defection and prevention of pilferage and fraud.
  • H1: management audit assist in the detection and prevention of pilferage and fraud.


The significance of this study can be viewed into two major aspects practical and academics.  Practically, this study therefore may be of a special important to the following interest groups who may find the research beneficial.

(1)        The management itself, who make the organization decision and policies.

(2)        The stockholders and other interested potential investor.

(3)        The general public who have right to be informed the activities of any such organization.

(4)        The financial analysis.




Academic significance

(1)  Students: This research will enable students who intend to study the course in future to make use of the work both in their academics and research programs (reference purposes).



  1. Appraisal: It means to estimate the value or quantity of the management audit.  In essence it refers to the estimation of value or quantity of job.
  2. Arbitrary:This is the reading a decision based on opinion or impulse only and not on reason.
  3. Investors:They are prospective business that are financial balanced with the intension to promote financial ability of a company.
  4. Financial Statement: This refers to annual balance sheet or statement of affair of an organization.
  5. Management Audit: Is also known as operations audit, serves as a yardstick for measuring the ability of the management and also to determine the objectives of the organization.


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