Basic Standards Norms and Values of Management Audit

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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
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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
Independent
and Fair
Legitimate
Professionally
competent
Management
Audit
Continuous and
Objective
Improvements
Participative and
Collaborative
Evidencebased
Transparent
and
Accountable
Decentralized and
Delegated
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
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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
Basic Principles
General
Standards
Standards
Reporting
Standards
Field Standards
Standards of Management Audit
Planning
Standards
Institutional
Standards
Reporting
Standards
Standards
Examination
Standards
Standards of
Auditor
Reporting
Standards
Basic
Principles
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Legality
Regularity
Economy
Efficiency
Effectiveness
Autonomy
Independence
General
Standards
Field
Standards
• Professional
competency of
auditors
• Relationship of
the auditor with
the audit
institution and
audited
organizations
• Ethical and moral
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
All
pertinent
information
to
satisfy meaning of
audit.
Accuracy
and
objectivity with factbased
Convincing
persuasive
presentation
with
Rationally balanced
and evidence-based
Consistency
Constructive
reform-driven
and
Acknowledgement
of cooperation and
participation
Values and Morals of Management
Audit
• 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 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.
Core Values of Management Audit
Value of Management Audit for
Stakeholders
Political leadership - Policy
Citizen as Clients Satisfaction
Value
orientation
Market – Delivery and
Satisfaction
Tax Paying
Community –
Resource utilization
Assurance
Management Audit
Insight
Objectivity
Governance
Assurance
Management
of risks
Objective
control
Catalyst
Insight
Assessments
Analyses
Integrity
Accounta
bility
Objectivity
Independence
Compet
ency
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
Delivery of Public Value in
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
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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
NormsTypes
of Management
of Norms
Audit
Descriptive Prescriptive
and
and
Subjective
Injunctive Proscriptive
Norms of Assessment
Good Policy
Good Management
Good Result
• Formulation of clear,
evidence-based,
predictable and
consistent policies
• Competent organization
and management
• Result-based
management
• Performance
management
• 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
• Policies and strategies
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Personal capability
Family influences
Religious values
Personal standards and
needs
• Values and norms
• Behaviour of leaders
• Behaviour of peers and
subordinates
• Group dynamics and
teamwork
• Performance systems
• Codes of conduct
• Accountability mechanism
• Disciplinary measures
• Participative management and
teamwork
Individual
capacity and
Willingness
Institutional
capability
Organizational
behaviour
Socio-cultural
environment
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Global system and standards
Governance capability
Norms and values of society
Ethical climate of profession
Ethical Framework in Management
Audit
Values
Morality
Ethics
• Rules for ‘right’ and ‘wrong’
• ‘Should be’ or ‘should not be’
• Emotion and belief
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External exposure
Social description
Personal description
Response to society
• Internal exposure
• Driving principles, values and norms
• Drive and motivation
Ethics in Management Audit
Management Audit: Jurisdictional
Norms
Jurisdiction
of Autonomy
Investigative
Jurisdiction
Delegative
Jurisdiction
Jurisdictional
Framework
Reformative and
Suggestive
Jurisdiction
Developmental
Jurisdiction
Administrative and
Punitive
Jurisdiction
Reporting Norms of Management
Audit
Policy:
Appropriateness,
Evidence-based
Predictability,
Implementability
Good Management
Practices: Strategic
Planning,
Performance
Management,
Information System
Outputs and
delivery:
Competitive and
Efficient
Effectiveness:
Results and
Satisfaction
Norms of
Reporting
Audit
Outcomes
Accountability:
Legal, Professional,
Market
Any queries….PLEASE
Thank you for kind attention
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