The main objective of appraisal of management decision is to see how decisions are taken by the Management. Discuss the steps in appraisal of Management Decision.

The main objective of appraisal of management decision is to see how decisions are taken by the management: Whether the decisions are taken after following the decision-making process. Whether such decisions meeting the organization objectives. Whether such decisions are documented in a fair manner. Steps in appraisal of management decision: In appraisal of management decision, the following step should be considered by the auditor. Whether the management decision is well defined or not. Whether the Objectives and desired output has been set out clearly and relate explicitly with the policy or strategy adopted by the company to help in post event evaluation of the management decisions. Ideally the objectives of every management decision should be specific, measurable, agreed, realistic and time-dependent. While taking decision, whether the management has considered the effect of the associated risk; time availability; scale and location; scope for alternative arrangements with other public bodies; degree of involvement of regulators and civic bodies; capacity of the market to deliver the required output; alternative asset uses; use of new or established technology; and environmental issues. In case of the major investment decision, whether the various possible options were considered. Whether such potential options are analyzed and reviewed in terms of value, costs, benefits, risk and uncertainties of options. Whether the options are selected after due analysis and a consensus decision is taken after a manager has analyzed all the alternatives. Whether the selected alternative was implemented efficiently. Ongoing review of management decision control and evaluation system actions need to be monitored.