AUDITING (5545)

Management Audit
“

Program is
an Important Activity in
Audit Process ”

Prepared by:- Hina Imtiaz

Submitted to:- Mr. Younis
 Contents
 Introduction


 Definition


 Objectives of Management Audit



 Practical Study on MCB



 Back Ground


 Information system in MCB



 Recommendations & Conclusion


Introduction
 Today, the business has become so large and complicated that most of the
unhealthy situations are attributable to the basic defects of the
organizational structure and ineffective type of the organization. The firms
of professional accountants are being called upon to render management
consultancy services.

 The object of management consultancy services is to improve the operations
of an organization. The presence of management service amounts to a
practical guarantee that the work will be satisfactory. It has to offer
recommendations and its job is over.


 Thus, Management audit is a new concept and goes beyond the conventional
audit. It is actually a comprehensive and a critical review of all aspects of
management. It is concerned with the appraisal of the efficiency of
management. It can be said to be an expansion of internal audit and the
idea has developed recently.


 

Definition
 T.G.Tokhe


 “The Management Audit has been defined as a comprehensive

critical review of all aspects of process of Management”.

 William P.Lenoard


 “A comprehensive and constructive examination of an

organizational structure of a company, institution or branch of
Government, or of any component thereof, such as a division or
debarment and its plans and objectives, its means of operations and
its use of human and physical facilities”.


Objectives of Management Audit
Objectives of Management Audit


 The best possible results of the operations of concern.


 smooth running of a business.

 efficiency and effectiveness of the management.

 The achievement of objectives and targets set forth by the management.

 The effective discharge of their duties and responsibilities

 The most efficient organization and smooth running internally.

 To evaluate performance by relating inputs (human and physical both) with outputs.

 PRACTICAL STUDY
 ON

 MUSLIM COMMERCIAL BANK

Back Ground
 MCB is one of the leading banks of Pakistan with a deposit base of
about Rs. 280 billion and total assets of around Rs.300 billion.
Incorporated in 1947, MCB soon earned the reputation of a solid and
conservative financial institution managed by expatriate executives.
In 1974, MCB was nationalized along with all other private sector
banks.
  
 The Bank has a customer base of approximately 4 million and a
nationwide distribution network of 1,026 branches, including 8
Islamic banking branches, and over 300 ATMs, in a market with a
population of 60 million.
  
 During the last fifteen years, the Bank has concentrated on growth
through improving service quality, investment in technology and
people, utilizing its extensive branch network, developing a large
and stable deposit base.
  
  

 

 Vision statement:


 Challenging and changing the way You bank



 Mission statement:


MCB bank’s team, of committed professionals is



dedicated to maintaining long-term

DATABASES USED IN MCB

 FOLLOWING Databases used in banks

 Visual basic
 Crystal report
 Access
 Sq server
 Dot—net

Banking System
 The Banking System provides access to eight basic
functions of banking. These include:

 Bank Accounts
 Printing MICR Information 
 Checks 
 Deposits
 Adjustments
 Check Register
 Check Reconciliation
 Recurring Payments



SOFTWARE USES BY MCB
 Mostly Pakistani Banks used the following Software which Are the


following


 Finnone
 Pibus
 Tcl
 Kapettee
 Sql
 Vb –Net


 MCB used the Following software.



 Finnone
 Sql
 Vb-NET.  
BANKING MANAGEMENT SOFTWARE FINNONE TM
SUITE

 Specific This complete Banking Management suite,

FinnOneTM, has been specifically designed to cater
to the technology needs of the banking and financial
services industry.


 This Banking Management suite consisting of

applications provides operational and decision-
making support to the fast changing financial services
industry.
INFORMATION SYSTEMS OF MCB.

Secrecy of Information is also very crucial for the



effective working of Bank. MCB has made the

following systems which can be called Integral Systems
of Core Banking Functions which run its day to day
banking Functions:


 Multi-currency Interbranch Banking System.

 General Ledger Banking System.
 Remittances system.
 RTC System.
 ATM & Online Systems.

IT RELATED PRODUCTS OFFERED BY
MCB.
  
 ATMs
 DEBIT CARDS
 SMART CARDS
 MOBILE BANKING
 CALL CENTRE

AUDITOR’S VIEW:

 Sufficient security levels are provided in the system for access to

system and within the system. Also security is built-in for cross
branch transaction processing.

 Proper verifications and authentication of reports signed by
responsible staff is required.


 Proper filing of these reports is required for successful operation.



 The disaster recovery, back up and fall-back procedures are

ensured in the System, this will certainly depend upon the
procedures and logistics of the back up tapes to the vaults
arranged for this purpose.

Recommendations
 Therefore one recommendation that is notable and must be
pointed out is that if the company purchases a new version
of Oracle GL, it should be further customized in a better
way with the specific needs of the Financial Control Division
in mind.


 In the future, MCB also has expansion plans and is expected to

open branches and start operations in some foreign
countries also. When that happens, a great deal more will
need to be invested in the company’s information system
and it would remain to be seen whether the company would
continue using the current information system or switch to
some other information system.

Conclusion
 MCB aims to keep its business in line with the top
banks and corporations of the country and
therefore, it has chosen Oracle E-Business Suite as
the application software that manages and
supports its business applications.
Thank you for your
attentive listening
Any Question or queries


please……