A management audit is an in-depth review of the individual parts of a business and how they function and interrelate to produce overall results. Properly executed, the management audit provides the best overview available of how a business works as a single entity. It may also be used to evaluate specific functions within the organization to determine their performance efficiency. The management audit takes into account the unique characteristics of each company, adjusts its standard of measurement accordingly, and reflects the specific nature of its corporate culture. In today's hypercompetitive business environment, the management audit could mean the difference between business success and failure.

This manual helps CPAs and their clients understand and regulate the health of businesses by systematically identifying areas that affect profitability most and by offering experience-based solutions for improving efficiency in these areas. Operational Profitability:

• Demonstrates how a thorough and professional management audit gives clients the information they need to remain competitive, increase efficiency, and improve profitability in every area of business
• Provides step-by-step guidance on setting up a management audit, establishing standards for effectiveness, and defining goals and expectations
• Supplies analytical tools for evaluating client operations—financial ratio analysis, the seven causal ratios, the nine secondary ratios that measure effect, cash flow and break-even analysis, capacity analysis, downtime analysis, and more
• Explains how to develop carefully targeted action plans that help clients make needed improvements—including numerous methods for reducing operating costs throughout the company.

For CPA firms with clients in manufacturing and distribution, Operational Profitability provides a blueprint for services that benefit clients, increase firm revenues, and strengthen firm-client relationships.

About the authors

Add value to services and increase revenue while giving your clients more of what they need

Operational Profitability explains in complete detail how to conduct a management audit that will give clients the essential information they need in today's fiercely competitive marketplace. At the same time, it enables CPA firms to expand their range of services, strengthen business relationships, and increase profits. Operational Profitability walks you through all the steps of a management audit that will help your clients identify and improve those areas of their businesses that most affect profitability. It explains

• The basic techniques of the management audit, what it involves, how to set it up, and how to establish a clear set of organizational goals
• How to rethink and rebuild an organization from the bottom up
• How to use a full range of analytical tools for identifying problem areas throughout the company
• How to assess the way a firm manages inventory, purchasing, production planning, and operations
• How to evaluate and reduce operating costs.