Presentation on theme: "PART II – Management Audit: Basic Standards, Values and Norms Shared by Pratap Kumar Pathak."— Presentation transcript:
PART II – Management Audit: Basic Standards, Values and Norms Shared by Pratap Kumar Pathak
Standards of Management Audit Standards are principles-focused, mandatory requirements for ensuring professional practice of examination of management. Standards prescribe the norms of principles and practices, which the top management and management auditors are expected to follow in the – Planning the audit – Selection of organization or function to be audited – Formation of management team – Guidelines and criteria for assessment and examination – Benchmark of ethics and morality – Professional accountability – Quality of audit results
Standardized Management Audit Management Audit Independent and Fair Evidence- based Transparent and Accountable Decentralized and Delegated Participative and Collaborative Continuous and Objective Improvements Professionally competent Legitimate
Purpose of Management Audit Standards Delineate basic principles that represent the practice of management audit Provide a framework for performing and promoting a broad range of value-addition Establish the basis for the evaluation of management audit performance Foster improved organizational processes and operations
Relevance and Application of Management Auditing Standards Provide framework for performing high quality audit and compliance to standards is expected to ensure that a high quality of audit is performed and communicated with results. Auditing standards apply to both the management auditor and audit institution as well as in the whole exercise of audit. Standards ensure legitimacy of management audit system.
Management Audit Standards Attribute Standards Purpose, authority and responsibility Independence and objectivity Proficiency and due professional care Quality assurance and improvement Performance Standards Strategy and plan Performance capacity Examination Reporting Accountability Supervision and monitoring Ethical Standards Code of ethics Code of conduct Management of conflict of interest Management of relationships
Different Components of Management Audit Standards Standards Basic PrinciplesField Standards Reporting Standards General Standards
Standards of Management Audit Standards Planning Standards Institutional Standards Standards of Auditor Examination Standards Reporting Standards
Basic Principles Legality Regularity Economy Efficiency Effectiveness Autonomy Independence General Standards Professional competency of auditors Relationship of the auditor with the audit institution and audited organizations Ethical and moral standards Field Standards Framework for the purposeful, systematic and balanced steps Rules of investigation to achieve a specific result Proper supervision of audit process and review of quality Reliability, adequacy and sufficiency of information Reporting Standards All pertinent information to satisfy meaning of audit. Accuracy and objectivity with fact- based Convincing with persuasive presentation Rationally balanced and evidence-based Consistency Constructive and reform-driven Acknowledgement of cooperation and participation
Values and Morals of Management Audit Values Values are the rules of management audit by which audit organizations and auditor/s make decisions about right and wrong, should and should not, good or bad, feasible or infeasible, and so on with respect to standardized management audit. Morals Morals have a greater social element to values and tend to have a very broad acceptance of audit. These are the people’s fundamental beliefs and motivational basis for ethical judgment in social and professional conditions of management audit.
Value of Management Audit for Stakeholders Value orientation Political leadership - Policy Tax Paying Community – Resource utilization Market – Delivery and Satisfaction Citizen as Clients - Satisfaction
Ethical Framework of Management Audit Professional ethics: Utility, objectivity, fairness Performance ethics: Delivery of standardized and ethical performance Political ethics: Political neutrality, impartiality and fairness Developmental ethics: Right approach, priority and allocation of values for betterment Innovation ethics: valuing innovation and creativity Service ethics: Effective service delivery with public service motivation Relational ethics: Managing professional relationships during management audit
Normative Framework of Management Audit Norms are for maintaining professional standards of intent, process and outputs of management audit Norms build legitimacy, validity and recognition of management audit system
Norms of Selection Management Audit Intensity of risks Political and public concern Materiality and significance Visibility Past audits and seriousness of concern Estimated impacts Stage of programme or project development and implementation Coverage of importance
Types of Norms Norms of Management Audit Descriptive and Injunctive Prescriptive and Proscriptive Subjective
Norms of Assessment Good Policy Formulation of clear, evidence-based, predictable and consistent policies Good Management Competent organization and management Result-based management Performance management Good Result Sufficient services are delivered Services reach the intended target group Services are delivered on time Service results lead to the achievement of policy Ensure value for money
Factors Determining Ethics in Management Audit Global system and standards Governance capability Norms and values of society Ethical climate of profession Values and norms Behaviour of leaders Behaviour of peers and subordinates Group dynamics and teamwork Culture Policies and strategies Performance systems Codes of conduct Accountability mechanism Disciplinary measures Participative management and teamwork Personal capability Family influences Religious values Personal standards and needs Individual capacity and Willingness Institutional capability Socio-cultural environment Organizational behaviour
Ethical Framework in Management Audit Rules for ‘right’ and ‘wrong’ ‘Should be’ or ‘should not be’ Emotion and belief Values External exposure Social description Personal description Response to society Morality Internal exposure Driving principles, values and norms Drive and motivation Ethics
Management Audit: Jurisdictional Norms Jurisdictional Framework Investigative Jurisdiction Delegative Jurisdiction Administrative and Punitive Jurisdiction Developmental Jurisdiction Reformative and Suggestive Jurisdiction Jurisdiction of Autonomy
Reporting Norms of Management Audit Norms of Reporting Audit Outcomes Good Management Practices: Strategic Planning, Performance Management, Information System Policy: Appropriateness, Evidence-based Predictability, Implementability Outputs and delivery: Competitive and Efficient Effectiveness: Results and Satisfaction Accountability: Legal, Professional, Market
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