A management audit checklist is used by audit management to ensure management systems and processes are effectively addressing the objectives and goals of the business or company. This template can be used by compliance teams or audit managers to record and report any act of non-conformances or misconduct. The template has been built to guide the inspector to perform the following:
The completed sample report provides an example of the type of management audit that can be generated and shared electronically using the SafetyCulture (formerly iAuditor) mobile app.
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A management audit is a systematic approach that aims to analyze the effectiveness of management systems of an organization. It assesses how management teams operate the business and evaluate the results of implemented policies, protocols, and procedures in carrying out corporate objectives and safety standards.
A comprehensive management audit usually involves assessing department processes, conducting individual assessments on team members, and looking at the overall performance of the management department to determine what can be improved and what the team does right.
While individual assessments may be part of the audit, the entire goal of a management audit is to assess the performance of the team as a whole and not single out any individual.
Management audits are a very important part of continuous improvement and have a positive effect on the organization as a whole. This is because a management audit allows you to find performance lapses with your management team. That way, you can find better ways to utilize resources, designate tasks, and get the most out of your workforce. On top of that, it makes it easier for the organization to make decisions geared toward improving performance and productivity.
A well-implemented management system can empower a management team to work and communicate effectively, minimize risk, lower employee dissatisfaction, and reduce wastage.
Key benefits of performing a management audit are the following:
Performing an internal management audit is a tricky task. This is because when you designate employees to conduct the audit, their personal biases may affect the outcome of the audit and produce skewed results, which can affect the decisions you make as a result of the audit. This is why most companies opt to hire third-party organizations to conduct the audit for them and ensure that the results are fair and unbiased.
When hiring a third-party organization for a management audit, one or two consultants would visit the business premises and evaluate management practices and interview individuals. That way, they can gauge the performance of the management team and provide you with accurate recommendations and results.
There are various areas of a management audit since these assessments take a look at the management team as a whole. On top of that, the areas of the audit may also vary depending on the needs of your organization and your industry. That said, here are some of the typical areas to cover when conducting a management audit:
Since management teams are in charge of strategic planning, a key area of the audit should be how well the team creates strategies and see if it aligns with the company’s vision and goals and if it’s effective. Some methods to use during strategic planning include PESTLE analysis and SWOT analysis.
It’s also important that the audit includes an assessment of the team’s leadership abilities to check if they are pushing the rest of the company in the right direction.
The company’s organizational structure has a major effect on communication, coordination, and efficiency. This is why most management audits also cover this area comprehensively.
It’s critical for the audit team to assess the management’s financial management capabilities. The company’s resources should always be properly allocated and distributed, and a comprehensive management audit should check for that.
The last major area is operational efficiency. This allows auditors to check how well the organization works with the management team at the helm and determine any potential improvement areas.
Conducting a management audit is a complex task that may look different for every team and organization. However, there are still standard steps that all management audit teams have to perform to ensure that they conduct the audit properly. These steps include:
Before beginning an audit, it’s crucial to create a comprehensive plan that includes the scope of your audit. This includes determining the primary objective of the audit, listing all the information you need to learn from the audit, and how you’re going to implement the audit.
Though this may seem simple, asking people the right questions will surely make a difference. Once questions are finalized, proceed with interviewing the organization’s employees. If using only one set of questions for employees and another one for management, note the differences in answers across different departments and job types.
The next step is gathering data. This is done by interviewing employees and members of the management team, and thoroughly assessing various business processes. Which is followed by validating the information by observing. Whether the observation is only for the day or a longer period of time, use a checklist of items to look out for such as problem areas or flagged issues. Ideally, this should be a digital checklist so that it’s easy to access and edit on-the-go.
Examine documents such as financial statements and other records of the organization’s processes. In addition to the evidence obtained in the previous steps, these documents can back up the auditor when presenting their findings to the organization’s management team.
After gathering the data, the team must analyze all of their findings. Typically, auditors gather large amounts of data during audits and need to examine the data to determine what it means in the larger scope of things. That way, they can identify improvement areas, strengths, and even best practices for team members to follow. This step can be a headache when using pen and paper for conducting the audit. This can be made easier with an audit management software. Though it can be difficult for old-school auditors to transition, doing so will not only help them but also the organizations they audit in understanding audit results.
The most important part of a management audit is the report that auditors create at the end. This report contains all of the data they gathered, including their interpretation. Typically, the report also has recommendations for the best way for the management to move forward based on the data gathered during the audit.
Lastly, the management team needs to interpret the report from the auditors and implement their recommendations. Since the recommendations are based on data, it’s much easier to make smart decisions that allow the management team to lead the company toward its goals more efficiently.
The last step of a management audit includes conducting follow-ups to ensure that everyone in the organization—from management to line workers—are following the best practices recommended by the audit. This step also involves periodic management reviews for continuous improvement.
The frequency of management audits varies from organization to organization. So, it’s important to assess the needs of the organization to determine if you should conduct the audits every few years, annually, or biannually.
The main principles of management audit include the following:
Typically, management audits are handled by third-party organizations or teams. This is to ensure a fair assessment and removes any potential biases that arise when conducting audits internally. Organizations can also perform internal management audits provided they select impartial auditors to carry out the process.
Typically, management audits can take between a few weeks to a few months to complete. This depends on the size of the organization, the needs of the management team, and other contributing factors. The key is to allot sufficient time to review all aspects of management.
Some of the main challenges auditors face during management audits include:
Management auditing involves the capturing of significant notes, interviews, and photo evidence in order to check if protocols are meeting company objectives. More time is often spent on data entry and paperwork as opposed to identifying observations and actioning recommendations.
Management audit is developed by a former manager of Leyland Motors and a management lecturer at Cambridge University, T. G. Rose, in 1932. Queens University School of Business professor William P. Leonard followed soon after. These endeavors both aim to establissh a comprehensive review of the management effectiveness of their respective entities.
This management audit example reviews the top management of the Universal Life company—starting from the administration, finance, insurance, policy, personnel management, contracts, hazard identification and control, event management, and legislation and industry standards. View this management audit PDF to see more.
Since management audits are complex tasks, most teams utilize digital tools to streamline efficiency and make for a speedier process overall. SafetyCulture (formerly iAuditor) is a great tool for management audits as there are many features that can make auditing a management team faster, more convenient, and more efficient. Here are some of the ways that SafetyCulture can optimize management audits:
To help you get started, we have created 4 management audit checklist templates that you can download and start using for free. All checklist templates are fully customizable and you can create your own – no programming skills required.
This annual management audit checklist can be used when auditing the compliance of an organization’s safety, reliability, maintenance and technical management plan. Conduct walkthroughs and interviews with key persons to assess whether the controls and processes meet certain requirements.
Inspection template Powered byA manager self-evaluation is one of the best methods to assess the leadership performance and management style of managers in handling people and teams. Share this checklist to the management team and let them answer whether they agree to the following statements or not. Ensure to complete the audit by affixing digital signatures.
Inspection template Powered byOne good indicator of an effective management system is a high employee satisfaction rating. Use this survey questionnaire to record employees’ personal evaluation towards their job, their work environment and the support that they get from the management. Share this template across the entire company and track the results via online dashboards.
Jona Tarlengco is a content writer and researcher for SafetyCulture since 2018. She usually writes about safety and quality topics, contributing to the creation of well-researched articles. Her years of experience in one of the world’s leading business news organisations helps enrich the quality of the information in her work.
This annual management audit checklist can be used when auditing the compliance of an organization’s safety, reliability, maintenance and technical management plan. Conduct walkthroughs and interviews with key persons to assess whether the controls and processes meet certain requirements.
A manager self-evaluation is one of the best methods to assess the leadership performance and management style of managers in handling people and teams. Share this checklist to the management team and let them answer whether they agree to the following statements or not. Ensure to complete the audit by affixing digital signatures.
One good indicator of an effective management system is a high employee satisfaction rating. Use this survey questionnaire to record employees’ personal evaluation towards their job, their work environment and the support that they get from the management. Share this template across the entire company and track the results via online dashboards.
