17. In the audit report, the tax auditor has to express his opinion as to Whether or not the financial statements give a true and fair view of the profit or loss and the state of affairs (the auditor is required to state this where the accounts of the assessee have not been audited under any other law); and Whether or not the prescribed particulars contained in the statement annexed to the audit report are true and correct.
28. 5. Appraisal of Organizational Functions. Management audit is not confined to critical appraisal of management functions alone (i.e., Planning, Organization and Control, etc. It has to be subject to its review organizational functions (i.e., Production, Distribution, Personnel, etc.) Management functions influence organizational functions. Planning is a management function and production is an organizational function. This explains the basic attitude of management audit.
29. A. Appraisal of Production For appraisal of production, management will have to review a number of activities like: a. Buying, b. Planning, b. Processes, d. Storage and e. Inspection.
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31. A . Appraisal of Purchase Function Following points are taken care of: a. Organization of purchase function. b. Purchase policy should be seen, collating the various clauses. c. It should be examined whether purchase Procedure necessitates that the purchase requirements should be dependent on production schedule and level of inventories. d. Does the company ensure regular and dependable supplier? f. How is latest market information collected? g. Are the prices properly analyzed?
32. B. The Appraisal of Distribution i . Sales Records. ii. Sales policy iii. Service to customer iv. Publicity. Accounts and Finance . Here management auditor should not criticize the technical accountancy of the company: That is the subject of financial auditor. Management auditor may point out, if necessary, statistical information, which may have bearing on decision-making in the organization. Following points are of concern to management au4itor in this area:
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