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What Are The Limitations Of Management Audit?

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A major limitation in implementing a  management audit, therefore, is related to  the selection of audit personnel. The  auditors, of course, must be competent in  background, experience, and professional  ability. But in addition, they must  demonstrate an ability to deal successfully  with human relations problems. In other  words, they must be able to objectively  appraise the actions of others without  generating undue suspicions and, thereby,  adding to a set of already strained  conditions. As already noted, the natural  feeling of someone being audited is one of  defensiveness; i.e., the auditors are working  for the boss who is “out to get me.” This  attitude must be avoided. To do so, the  better auditors will establish a pre-audit  condition expressing their willingness to  discuss their evaluation with the affected  personnel before it is reported to higher  management. In many cases this will evolve  into a negotiation-discussion process  whereby those concerned begin to view the  audit as a way in which weaknesses may be  pinpointed and their performances (and  rewards) improved.  Finally, essential to the success of the audit  is a willingness by those being audited to  accept change. Too many in management  positions, particularly those who have risen  through the ranks, feel that the current way  of doing business is good enough. They  may be allowed to retain this belief only if  the audit supports their contentions with  facts. Rarely will this be the case, and even  if it were, the “good enough syndrome” will  eventually destroy all desires for continual  improvement. The audit is designed to  pinpoint strengths and weaknesses in the  firm’s operations. It is up to management at  all levels to implement rewards or corrective  action. If no action is taken in response to  the auditor’s findings, then the effort has  been wasted.

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