How do audits serve as a tool for management?

Audits serve as a crucial mechanism for management by providing insights into the effectiveness and efficiency of controls and processes within an organization. When audits are carried out, they can highlight areas where improvements are needed and bring these issues to the attention of stakeholders, including management. This focus on improvement helps ensure that processes are aligned with organizational goals and enables management to make informed decisions that enhance operational performance.

By identifying weaknesses or inefficiencies, audits can lead to remedial actions that not only strengthen internal controls but also optimize business processes. The feedback generated from audits often serves as a catalyst for positive change, making it essential for management to engage with audit findings to drive continuous improvement in their operational frameworks. This ultimately supports better governance and increases stakeholder confidence in the organization's commitment to integrity and accountability.

Other responses, while potentially relevant to the broader context of audits, do not encapsulate the primary function of audits in a managerial capacity as effectively as the correct response.