Which statement best describes management audits?

Management audits are designed to comprehensively assess both the strategic plans and operational efficiency of an organization. This process involves a thorough evaluation of how well the organization is achieving its objectives, how effectively it allocates resources, and the overall performance of its management practices. By focusing on these aspects, management audits provide insights into the effectiveness of strategies and the efficiency of operations, allowing businesses to identify areas for improvement and enhance decision-making processes.

In contrast to the other statements, management audits are not mandatory for all businesses, meaning that businesses can choose when to conduct them based on their needs. They also do not focus solely on financial integrity, as that would limit their scope to only one aspect of the organization. Furthermore, while management audits can be conducted by external auditors, they are not exclusively external; they can also be performed internally to ensure that managers and employees reflect on and improve their practices.