An external management audit is defined as an independent examination of an organisation resulting in a statement to external users on the performance of the management function. External management auditing has links with, but also important differences from external financial auditing, internal operational auditing and management consultancy. The reasons for conducting external management audits are considered particularly in relation to the accountability of corporate management in society and the interests of various potential user groups. External management auditing is not merely a proposal but a reality with examples such as the Indian cost audit.Given the lack of British empirical evidence on users' views of external management auditing, bankers were surveyed to determine whether or not they would express any demand for external management audit reports on companies. A postal questionnaire was sent to a sample of 466 branch managers and head office staff in the three Scottish joint -stock banks with a resulting 63% response rate. Over 85% of respondents agreed that they would find the external management audit report useful in their corporate lending decisions and would always or sometimes use the external management audit report as part of the information on which to assess corporate management. The respondents considered that the external management audit report should include assessments both of the general management function and of the individual business functions. The responding bankers did express a demand for external management audit reports.A sample of 354 bankers with experience of corporate overdraft decisions received a simulation exercise involving an overdraft decision. The response rate was 58% and the main conclusion of this simulation exercise was that the addition of an adverse external management audit report did have a statistically significant effect on the responding bankers' corporate overdraft decision outcomes. The results of both the questionnaire survey and the simulated overdraft decision show that bankers would be interested in receiving, and would use, external management audit reports on their customer companies
