Risks, Checklists, Audit Programme
Format No: B/4.1.2. Assignment Name
Assignment No Engagement Manager
Company Name
4.1.2 Finance and and Accounts Accounts Risks Review Review Checklist Risk Listin !"hat "ron Can #a$$en%
Audit &t &te$s to 'e 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serv/
ations
Receivables Accounting and Management Management Process 4
Ineffective process invoice generation
Check the following in invoices: of the invoices a. Are serially controlled and verify if there are any duplicate, cancelled invoices and ascertain the reasons for the same !. Check Check if the the calculation of discounts, re!ates, prices etc are accurate !y verif in it a ainst
Invoices not !ooked accurately and completely resulting in revenue loss for the company. Calculate the amount to !e invoiced against the amount invoiced and check with receipts to identify the "uantum of revenue loss
Analysis of Invoice can !e done using CAA tools
40
. Invo Invoic ices es #egister$ %ist &. 'upp 'uppor orti ting ng documents such as terms and conditions (. )aym ent #egis ter *. Cred Credit it Not Notes es +. e!t e!to or #econ-
R is k s, C h e c kl is ts , A u di t
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &t &te$s to 'e 'eri()
Inade"uate receiva!les management
Auditor
Checklist
Audit
&te$ Calculate the delays in generation and posting $ dispatching of invoices with reasons as well as ageing analysis
4
*m$act An Anal)sis
+ime (or
elays in invoicing resulting in delays in receipts and funds !lockage. Calculate the average num!er of days of delay and the cash flow loss due to non receipt of funds on time
Check if credit notes are Credit notes not posted accurately and are accurately posted auth author ori/ i/ed ed !y the the resulting in revenue designated personnel leakage Calculate the revenue loss due to such credit notes 0enerate receiva!les ageing report and ascertain reasons for long pending outstanding and check the procedure for follow up of outstandings
elays in monitoring receipts resulting in cash flow loss. Calculate the average num!er of days of delay and the cash flow loss due to non receipt of funds on time.
*n(ormation Re,uired (rom Auditee
-.serv/
ations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
4
Audit &t &te$s to 'e 'eri()
*m$act An Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ 1!tain the documentation relating to de!tor reconciliation and verify if confirmations for the !alances are o!tained from the de!tors
Misstatement of de!tor !alances in the final accounts.
1!tain the !ad de!ts list and check if authori/ation is o!tained for write off of !ad de!ts. Check the procedure for resolution of unreconciled de!ts
2ad de!ts written off without sufficient 3ustification resulting in financial loss.
*n(ormation Re,uired (rom Auditee
Check the payments to ensure the following:
ations
#eperform the reconciliation process to ensure accuracy of calculations.
Payables Accounting and Management Process Inade"uate )ayment )rocess
-.serv/
Mismatch !etween actual payment and payment to !e made resulting in revenue leakages
a. )ayments are supported !y related )urchase 1rders, 0oods$'ervices #eceipt note and approval from the user department for receipt of material$service
a. )urch ase 1rder s !. )aym ent 4ouch ers c. )aym ent #egis
4
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &t &te$s to 'e 'eri()
*m$act An Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ !. )ayme aymen nt entr entry y is made accurately and completely for all the 0#N$'ervice notes
*n(ormation Re,uired (rom Auditee e. Agreement with the vendor
c. )aym )aymen entt is is mad made e as per the terms and
4
Calculate the delays in posting of payment entrie entries s with with reason reasons s as well well as agei ageing ng anal analys ysis is
elay in payment results in unnecessary ssary lia!il lia!ility ity impose imposed d as per per the the ter terms ms and and agreements with the vendor
a. Creditors ageing analysis
Calculate the interest charged !y the vendor for late payment Check if de!it notes are posted accurately and are auth author orii/ed /ed !y the the designated personnel. Ensure that the re3ections are authori/ed !y designated personnel
e!it notes not supported !y )urchase returns documents and replacement$ad3ustme nt not made accurately for the de!it notes
a. e!it notes
-.serv/
ations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ 4erify the process of uplicate payments reconciliation of made without receipt de!it$credit notes and of goods$service accounts paya!le Ensure that all dues are settled at the time of the full and final settlement and ade"uate follow up
*n(ormation Re,uired (rom Auditee
-.serv/
ations
a. 4endor reconciliation documents
elay in payment results in unnecessary lia!ility imposed as per the terms and agreements with the vendor Calculate the interest charged !y the vendor for late payment
4
General Financial Closure System 2ooks of Check the procedure for accounts not closure of !ooks and closed on a accounts and ensure that the closures are done on timely !asis a timely !asis. Check if the following are closed: a. %edger Accounts !. )5% account c. 2alance 'heet d. Cash 6low statement
elays in closure leading to non availa!ility of financials for review and decision making.
a. 2ooks Account
Ascertain delays in closure of !ooks and ensure the reasons for the delay
d. 2ank #econciliat-ion 'tatem-ent
e. e!tors ageing
43
of
!. %edg er summaries c. Age ing reports
e. 'tatutor y remittan
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
f. Creditors ageing g. 2ank #econciliation h. 'tatutory remittances )eform a 0% scrutiny to ascertain any irregularities in transactions posting and undert ak e a det ailed wherever review discrepancies are identified 4
Ensure that there are no unreconciled items on opening !alances 'tudy $ review of the Notes to accounts appended for ade"uacy of disclosure and compliance with statutory laws Compare !alances with previous periods and preparation variance analysis report
Inaccurate updation of accounts resulting in misstatement in financials.
a. 0eneral %edger
-.serv/
ations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en% Inade"uate provisioning
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serv/
ations
Check if the provisions made are accurate and su!se"uent accounting entries passed are correct. Check if the provisions are authori/ed as per the elegation of Authority Matri7 2
Fund and Cash Management 4
Inade"uate !udget system
#eview the !udget Inordinate deviations system and verify the from the !udget following: resulting in e7cess$short spending a. 2udget is prepared and
authori/ed on an annual !asis
a. Annual 2udget !. 4ariance Analysis #eport
!. E7penditure incurred is verified with the !udget and corrective actions are taken for deviations from the !udget
R is k s, C h e c kl is ts , A u di
c. #evised !udget if
&6unds Management would also include review of 6oreign E7change gains$loss, techni"ue of hedging etc depending upon the nature of the company.
45
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en% Inade"uate fund utili/ation
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ Ensure if review of investments $ !ank !alances, interest earned and identification of idle !alances is !eing done .
Inade"uate funds management resulting in idle funds and notional loss on idle funds
*n(ormation Re,uired (rom Auditee a. I nv es tm ent details !. 2ank details !ank and statements
Compare interest paid on credit o!tained from !anks vis-8-vis idle !alances if any9 and credit cycle credit o!tained from suppliers;.
Inade"uate control over physical cash$che"ues
Ensure if )hysical verification of cash is done < )eriodicity $ timings and reconciliation of differences in !alances if any.
a. Cash #egister
#eview the system of Internal Controls on collection of che"ues $ cash received < recording and serial issue of cash $ che"ue received vouchers.
a. Che"ue !ooks
!. )hysical Cash
!. )Cs c. Cash 4ouchers
6
-.serv/
ations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Format No: B/4.1.0. Assignment Name
Assignment No Engagement Manager
Company Name
4.1.0 #uman Resources 7rocess Review Checklist Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serva/
tions
R Planning Process =# )lan not a. >nderstand the meeting the process of =# planning o!3ectives of the to verify that ade"uate Company steps are taken to ensure that the candidate re"uirement pro3ected is 3ustifia!le
)ositions recruited not ade"uately 3ustified resulting in increasing =# Costs.
!. Compare actual vis-8vis the plan and check for ma3or deviations if any
Num!er of persons recruited in e7cess$short there!y resulting in =# inade"uate si/ing
a. Annual )lan
Check for re"uirements which are not properly authori/ed.
=#
R is k s, C h e c kl is ts , A u di
1
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ c. 4erify if any action taken, which is deviating from the plan has got the approval of the concerned person as per the elegation of Authority defined !y the company
*n(ormation Re,uired (rom Auditee
Approval not assigned for deviations resulting in non compliance with policy and inade"uate control effectiveness
Recruitment Process
'election of Candidate not as per the re"uirements of the Company
a. 4erify the process carried out for selection of the candidate. Ensure if it is in-house or outsourced to recruitment agency
a. #e"uisition form wherein the re"uirement of the candidate and the e7pectations are filled in !. Inerview$Assessm form ent Candidate?s c. resume d. 1ffer letter #ecruitment e. policy and 1perating
!. If it is outsourced to a Improper selection recruitment agency of recruitment verify if the process agency resulting in carried out for selection recruitment flaws. of the agency is done after proper evaluation
52
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ c. Check if the recruitment of the candidate is supported !y documents, vi/. resume, interview results, terms of employment, offer letter etc.
Non availa!ility of supporting documents for selected candidate resulting in inade"uate 3ustification for candidate selected
d. Ensure if the selection made is as per the re"uirement raised !y checking the skills and "ualifications re"uired are met !y the person selected
Candidate selected not meeting the re"uirements of the department resulting in inefficiency in the functional area
e. Ensure that the =# department has carried out the recruitment without any delay !y comparing the date of re"uest and date of recruitment
elay in recruitment resulting in positions not filled up within the re"uired time leading to inefficiency and overtime costs for e7isting the employees
*n(ormation Re,uired (rom Auditee )rocedure availa!le
-.serva/
tions if
R is k s, C h e c kl is ts , A u di
0
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or
*n(ormation Re,uired (rom Auditee
Audit
&te$ f. Check if ade"uate !ackground verification has !een done for the candidate selected. If the selection is through the recruitment agency, check if the agency has carried out ade"uate !ackground check for the candidate selected
Inade"uate !ackground verification resulting in selection of candidate not suita!le for the related vacancy
g. Check if the 'election not as per recruitment is authori/ed the re"uirements of !y the appropriate the company personnel
Induction Induction formalities not completed as per re"uirements
a. Check the personnel files and ensure if the induction formalities checklist is signed and completed on time
Inade"uate induction formalities resulting in administrative inconveniences eg. 'alary payment to !e processed seperately !ecause of not opening !ank account of the employee on time;
a.
!.
Induction Checklist if any )olicies$Code of conduct documents signed !y the employees
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ !. Check if the new 3oinee has !een made aware of the key personnel policies of the company
*n(ormation Re,uired (rom Auditee
-.serva/
tions
Inade"uate communication of company?s policies resulting in dilution of Company?s o!3ectives
Attendance Management
Inade"uate procedures for monitoring attendance of the employees
a. 'elect sample of attendance register manual$system generated; for a month and compare it with the leave records to ensure that the attendance captured is accurate
Inade"uate attendance captured resulting in ina!ility to compare the salary paid to num!er of days worked
!. In case of leave as selected a!ove, check if the leave has !een sanctioned !y the concerned personnel as defined in the elegation of Authority.
%eave not sanctioned !y the designated authority resulting in control lapses and inaccurate payroll processing
a. Attendance #egister!. %eave #ecords
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ c. Check if the leave records of the employees is complete with respect of updation of various types of leave C%$'%$)%; and verify if the !alance leave calculation is done accurately.
Inaccurate calculation of leave resulting in payroll inaccurate processing and salary payment
d. Confirm that there is no possi!ility for modification of attendance$leave records and in case of modifications if any, are authori/ed !y the relevant person.
)ossi!ility for modifications in records resulting in non relia!ility of data
e. If the attendance is Incorrect logic in the captured using system resulting in electronic devices, incorrect payouts check the accuracy and authenticity !y reperformance.
*n(ormation Re,uired (rom Auditee
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
Payroll Processing a. Inade"uate a. Check that the person 'egregation of capturing the attendance uty and the person processing the payroll is different, to ensure ade"uate segregation of duty.
Inade"uate 'egregation of uty resulting in unauthori/ed access to records increasing the possi!ility for manipulation
Inaccurate !. )ayroll ata!ase
6ictituous emplo yees in the payroll resulting in higher salary costs for the company
!. Compare the employee details as per the attendance register and employee details as per )ayroll register and check for any dummy names in the payroll register
c. 1!tain list of new )ayment made in 3oinees for the last three e7cess to new months and verify that in 3oinees case of new 3oinees the date of updation of the entry in employee list is on the date as mentioned in the offer letter
3
a.
)ayroll ata!ase
!.
1ffer letter for salary details
c.
%ist of new 3oinees
d.
of %ist resignees
e.
of %ist employees transferred$ promoted
f.
Authori/ed )ayroll #egister
-.serva/
tions
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ d. 1!tain list of resignees for the last three months and check if any names still appear in the payroll employee list
'alary paid to resignees resulting in higher salary costs
e. 1!tain the salary details from the payroll register and select a sample of employees and check if the salary details updated are as per the offer letter
'alary paid not as per the terms and conditions resulting in higher payouts
f. 1!tain list of employees who have !een transferred$promoted in the last three months and check if their salary !een details have modified as per the transfer order$promotion letter
'alary paid not as per the terms and conditions resulting in higher payouts
*n(ormation Re,uired (rom Auditee
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
c. 'tatutory Non Compliance
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ g. If the payroll processing is done !y a software, reperform the calculation to ensure that the logic !uilt in the software is correct
)rogram logic inaccurate resulting in wrong salary processing and inaccurate payouts
h. Check if the payroll calculations are authori/ed !y the concerned person prior to transferring it for payment
Inade"uate authori/ation document authenticity
i. 4erify )6$E'I$)rofessional a7 deductions are in compliance with the prevailing 'tatutory Norms.
'tatutory non compliances resulting in penalties and offences as defined under the concerned 'tatutory #egulation
*n(ormation Re,uired (rom Auditee
a. 1!tain the @ey )erformance Indicators @)Is; defined for each role if availa!le
tions
for
Per!ormance A""raisal not Appraisal aligned to performance
-.serva/
Appraisal a. #ecords!. Appraisal )olicyc. @ey )erformance Indicators :@)Is; if availa!le
Non definition of @ey #esult Areas resulting in inade"uate communication of role profile and non alignment of role to company?s the o!3ectives
5
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ !. 1!tain the appraisal sheets and check if the appraisal is done !ased on the @)Is defined
Appraisal not aligned to performance resulting in mismatch !etween the position and the person
c. In case of non availa!ility of standard @)Is, ensure the following: Appraisal is done !y the concerned functional head to whom the employee reports he scores given
Appraisal not aligned to performance resulting in mismatch !etween the position and the person
d. Ensure that the appraisal records are kept safe and confidential. Check who are the authori/ed persons for handling the appraisal records and ensure that the records are not made availa!le to anyone other than the authori/ed persons
Non confidentiality of appraisal records resulting in employee dissatisfaction and unrest
6
*n(ormation Re,uired (rom Auditee
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ e. Check if the salary upgradation for persons promoted is as per the company?s policy
*n(ormation Re,uired (rom Auditee
-.serva/
tions
Non compliance with Company?s policy resulting in inefficiency
#raining and $evelo"ment Increasing raining Costs
a. 1!tain the list of training programs conducted during the past si7 months
a. .raining )rogramme details !. .raining attendance sheet and 6eed!ack form c. 'upporting documents for training cost d. .raining 2udget and approvals
!. 4erify the attendance register capturing the training information and also check the training feed!ack forms
raining provided to fictitious employees resulting in higher training costs
c. En"uire on the decisions taken !ased on training feed!ack forms
raining feed!ack forms not analy/ed ade"uately resulting in training inefficiencies and lack of !enefit to the trainees
R is k s, C h e c kl is ts , A u di
1
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ d. Check the supporting documents for the relevant training program vi/. food, location, trainer?s cost etc; and ensure that the cost incurred is supported !y the underlying documents
Non availa!ility of supporting documents for 3ustifying the cost incurred
e. Check if the cost is within the training !udget or approval is o!tained in case of deviations if any
Cost in e7cess$short of the !udget resulting in higher payouts or inefficiency
*n(ormation Re,uired (rom Auditee
Se"aration Inade"uate E7it 6ormalities
a.Is e7it happening Non compliance according to e7it policy with Company?s of the company policy resulting in inefficiency
a. E7it )olicy !. 6ull and final settlement forms of resigned employees
!. Are e7it interview Increasing attrition documents availa!le for due to all the employees who dissatisfaction have resigned Check in cases of resigned employees;
62
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ c. Check if the full and final settlement is done only after the employee has o!tained a Clearance from all the concerned department. Check the full and final settlement form and ensure that it is authori/ed !y all the concerned departments
*n(ormation Re,uired (rom Auditee
-.serva/
tions
>nauthori/ed access to company?s assets resulting in loss of information or resource
Statutory Com"liances
Non 'tatutory Compliance
a. %ist out the various %a!our Acts applica!le to the Company
Checklist to !e prepared for the provisions of various %a!our Act applica!le to the Company
!. %ist out the various returns and records to !e filed and maintained !y the Company c. Check the records against the list to ensure that all the relevant records are !eing maintained and updated !y the company
'tatutory non compliances resulting in penalties and offences as defined under the concerned 'tatutory #egulation
a. #ecords maintained under various acts !. Copies returns filed
of
#emittances c. challans
R is k s, C h e c kl is ts , A u di
0
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Checklist
Audit
&te$ d. Check if the returns 'tatutory non )6$E'I; are filed within compliances the applica!le due date resulting in penalties and offences as defined under the concerned 'tatutory #egulation
Auditor
+ime (or
e. Check if the remittances are made within the relevant due date
'tatutory non compliances resulting in penalties and offences as defined the under concerned 'tatutory #egulation
*n(ormation Re,uired (rom Auditee
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Format No: B/4.1.4 Assignment Name
Assignment No Engagement Manager
Company Name
4.1.4 *nventor) Risks Review Checklist Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.servat/
ions
Recei"t System
Inade"uate entry gate controls for material receipts
Check if there are Inade"uate control controls over necessary men$material implemented at the gate entering the premises to ensure that all the men$materials ruck$material !y Courier the , etc.; entering premises are recorded. Is there a procedure of confirming$cross checking the material$men reporting at the gate with the stores$visitee and the in time$out time of the truck$men entered in the register
Inade"uate confirmation of purpose of visit there!y resulting in unauthori/ed access to the information and facilities at the premises
a. Entry #egister maintained !y 'ecurity the 0uard
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
oes the security ensure hreat of e7plosions that !efore giving entry resulting in damage to there is no ha/ardous$ men and material in3urious$ prohi!ited material in the vehicle entry Are there clearly defined >nauthori/ed timings during which the during non office hours vehicles can enter$leave the factory. If yes, what happens if the vehicles come at some other time
Inade"uate process for material receipt at the warehouse
Check if the material into >nauthori/ed the warehouse is of material accepted only after checking the gate seal
receipt
Ensure that the goods are unloaded only after checking the supporting documents vi/. invoice, delivery challan
#eceipt of material not ordered. Also check if payment has !een made for the same
Check weighment procedures wherever applica!le and weigh !ridge certificate is availa!le for the receipts
differences Beight !etween the "uantity ordered and "uantity received and e7cess$short payment
a. 0oods Inward note and register !. 'upporti ng documen ts vi/. invoice and delivery challan, purchase order c. Beighm ent
-.servat/
ions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ Check if the gate entry and receipts entry tally. In case of differences, e7amine the reasons for the same
*n(ormation Re,uired (rom Auditee
-.servat/
ions
Missing receipt entries resulting in unauthori/ed movement of material #ecord the missing entries and trace the material. Also check if payment has !een made for material not received.
Check if there is any delay in posting receipt notes !y calculating the num!er of days of delay !etween the gate entry and receipts entry
elay in receipt of material there!y affecting issues and resulting in production delays Calculate the num!er of days of delay in production due to delayed issue.
R is k s, C h e c kl is ts , A u di
3
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
Material received without "uality clearances
Auditor
Checklist
Audit
&te$ Check for cases which do not adhere to the timeliness$"uantity$"uality parameters of the purchase order leading to shortages, re3ections, etc., to the purchase, accounts, development, vendor claims departments
*m$act Anal)sis
+ime (or
*n(ormation Re,uired (rom Auditee
#eceipt of su! standard material there!y affecting the production process Compile cases of re3ection in the production line due to su!standard "uality of material
Check if "uality clearance #eceipt of su! is o!tained for the standard material material unloaded there!y affecting the production process Compile cases of re3ection in the production line due to su!standard "uality of material Analysis of delays if any in elays in "uality performing "uality check verification resulting in !y comparing the date of delays in production receipt of material and date of "uality certificate
a. uality clearance certificates
-.servat/
ions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
Non tracking of Analyse the goods in goods in transit transit and record if there are inordinate delays in receipt of material
Calculate the num!er of days of delay !etween the order date and receipt date. Analyse the average time to !e taken and record transactions where there is inordinate delay.
a. %ist of goods in transit
'tatutory Non compliance
'tatutory non compliances resulting in penalties and offences under the relevant regulations
a. 'tat ut ory recor ds
Compliance with e7cise laws and ensuring completeness of statutory records re"uired to !e maintained
Check if the storage area warehouses at multiple places also needs to !e considered; is under the control of authori/ed person and entry for others is !arred
>nauthori/ed entry into the storage area resulting in loss or damage of material stored
Inade"uate transfer of risk
Check the ade"uacy of insurance cover for the premises and the material
he average amount held in stock at any point of time and the cost for setting up the warehouse after
5
ions
!. 'tock #egister
!. 'tock
Material Stacking Procedure >nauthori/ed access to storage area
-.servat/
a. Insurance )olicy for warehouse
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Audit
&te$ damages resulting in financial !urden, in the event of any catastrophe
3
Checklist
+ime (or
oes the inventory have earmarked places for storage material. Are damaged material $material that have not cleared "uality$line defects are placed separately from the good "uality material
Mi7ing up of goods resulting in inaccurate issues and inefficiencies in production
Are !in cards maintained and all receipts and issues are accurately updated
Non maintenance of !in cards and stock register results in inaccurate knowledge on material availa!ility leading to e7cess purchases. Check if purchases have !een made inspite of availa!ility of material and ascertain the amount incurred for the purchases.
36
*n(ormation Re,uired (rom Auditee
-.servat/
ions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.servat/
ions
Issues Management Inade"uate 'elect the issues made system for from the stock register issue of and check if the issues material from are tracked to re"uest the warehouse from various departments
3
Issues made without the re"uests resulting in inaccurate dispatch of stock leading to misutili/ation
a. Issue #e"uest$21 M !. 'tock #egister
Check if there are delays elay in issues in issue of material !y resulting in production calculating the num!er of delays. days of difference !etween the issue re"uest and the actual issues Check for material returns Inaccurate issues from the line duet to resulting in production wrong issues. delays. Calculate the time difference !etween the issue re"uest and the correct issue "uantity for the delays Check if the issues are updated accurately in the !in card and in the stock register for each of the issue re"uests
Inaccurate updation resulting in incorrect stock position. Check the stock reconciliation records and identify cases where the reconciliation was
31
a. %ist of returns from the line
a. 'tock #egister !. 2in Card c. 'tock #econciliatio n #ecords
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
necessitated due to inaccurate updation in stock records.
Stock Reconciliation Process Inade"uate process for reconciliation of stock
3
Check the following to ensure the ade"uacy of the stock reconciliation process:
ifference is any resulting out of stock reconciliation implies the funds lost due to stock a. 6re"uency of inade"uate handling procedures carrying out t he stock reconciliation and the last date when it was carried out !. Cut off procedures at the time of stock taking c. ocumentation for stock verification and ensure if reasons are captures for the differences and the action taken for ensuring non recurrence of
72
a. 'tock #egister !. )hys ic al verification documents c. Approvals for write off
-.servat/
ions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.servat/
ions
reconciliation check if it is authori/ed as per the delegation of authority matri7 and such written off stocks are physically availa!le e.
3
)hysically verify certain sample cases to ensure that the stock are physically availa!le
Check if non moving stock is kept separately and is reported to the Management from time to time
=olding of stock for a long period, implies !lockage of funds.
Check if reorder levels are Inaccurate fi7ing of fi7ed ade"uately to ensure that ordering of stock is reorder levels accurate
Check for cases where orders are made !efore the stock reaching the reorder level and the financial payouts for such procurement
Inade"uate Monitoring of moving, non damaged stock
a. %ist of non moving$damage d stock
)erform an ageing analysis of non moving Ensure that damage stock stock and ascertain the is kept separately and is interest lost on funds reported to the !locked. Management from time to time
30
a. #eorder level policy
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Format No: B/4.1. Assignment Name
Assignment No Engagement Manager
Company Name
*..+ *n(ormation &ecurit) Review Checklist
3
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
Security Policy Revie% Non definition of 'ecurity )olicy in accordance with !usiness re"uirements relevant and laws and regulations
En"uire a!out Information security policy availa!ility
%ack of definition of security information aspects results in risk compromise of If e7ists ask for its last of availa!ility, renewal and confidentiality and approval integrity of data and Ensure that the policy information processing has !een assets communicated to all employees and other third parties involved in aspects relating to information security in
a. Informati on 'ecurity )olicy !. Minutes of Meetings in which the policy is reviewed
-.serv/
ations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ Check if confidentiality agreement e7ists with employees and other third parties who have critical access to information in the organi/ation
*n(ormation Re,uired (rom Auditee
I# Assets Management Inade"uate Maintenance of I Assets
ations
Confidentiality Agreements with employe es and third parties
#eview the agreement and note the clauses of security. Ensure that clauses for legal recourse, in case of compromise of confidentiality is
3
-.serv/
Check if inventory of 1!serve if no inventory assets e7ist of I assets e7ists. software and hardware; #eview the columns and ade"uacy of heads Check if licenses are
3
asset a. I #egister
!. I assets procureme nt details
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
#eview if the register maintained is ade"uately. Ensure thatthe register is complete and is updated for every purchase, transfer Check if any guidelinese7ist for classification of information as sensitive, non sensitive etc. Identify if the asset holding such sensitive information is classified and
3
Inade"uate procedure for disposal of I assets
#eview the I assets$media disposal procedures in place %ist out the cases of computer sales in the last year and analy/e how the hard discs were removed from
a. Information Classification guidelines if any
Access to information to outsiders due to inade"uate disposal methods
a. %ist of assets disposed
-.serv/
ations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serv/
ations
uman Resources Security
3
Allowing access to persons without thorough !ackground check
Are !ack ground checks done on the all candidates, third party users and contractors
>nauthori/ed access to information to persons who may misutili/e the same
%ack of awareness a!out information security in the organi/ation
training Bere there any Inade"uate resulting in lack of training awareness and programmes conducted on I financial pay outs security
Inade"uate separation procedures
#eview procedure
4erify in few cases 4erify who is responsi!le for a. %ist of training programmes conducted and their details
Bhat was the last date the training was conducted the for employee resignation.
#eview the checklist for full and final settlement to review I access settlements
Access to information even after resignation of the employee. 1!serve cases where the full and final settlement process is not complete. )ro!e into list of items not returned !y the employee.
33
a. %ist of resigned employees !. 6ull and final settlement
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
Physical and &nvironmental Security Process Inade"uate 'ecurity at the server room
#eview the security Compromise of system for I security at the server facility, server room room would result in the Note down all the compromising entire I infrastructure checks availa!le of the company. Identify the threats due to compromise in the server room physical security and list.
3
#eview the environment ha/ards and threats and related controls. Eg. 6ire, water logging etc
)roduction$operations stoppage duet o occurrenc e of such events
owntime and recovery time to !e calculated due to #eview the list of occurrence of such support utilities failures. and identify protection incase of failures #eview whether the
Insurance a. policies
-.serv/
ations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en% Inade"uate Maintenance of I assets
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ #eview whether AMC e7ists for all the assets 'erver, esktops, 2ack up, Network, >)', )ower, AC
owntime due to repairs and damages. Check the average downtime and fre"uent reasons for repairs.
*n(ormation Re,uired (rom Auditee
-.serv/
ations
a. AMC details !. #epairs register
In!ormation Security $e"artment Res"onsibilities revie% Inade"uate control against malicious codes
Note the anti virus software !eing used
Inade"uate !ack up information
Is there a !ack up system in e7istence. #eview the !ack up fre"uency, media, coverage, data recovery storage,
3
Inade"uate network management
of
'ystem !reakdown or inefficiencies due to 4erify whether the non updation of anti anti-virus is updated virus regularly %oss of data due to inade"uate !ack up procedures. Check the num!er of days of data that would !e lost in case of failure of !ackup mechanism
>nderstand the Compromise on software security network due to !eing used inade"uate network 1!tain the detailed design and network network diagram monitoring and identify the points of contact with e7ternal
35
a. Netw ork diagr am !. Netw ork secur ity
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serv/
ations
#eview the security procedures implemented in the e7ternal environment contact points #eview the network securitypolicy and procedures in place #un the network security analy/er on the network if in case necessary;
Analy/e Non availa!ility of audit logs
the
network
#eview the set of logs Non tracea!ility of generated, printed actions due to non !y the server $ I availa!ility of audit logs operator and check the procedure of analysis #eview the retention procedure of the audit logs generated
6
a. Audit details
logs
D
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serv/
ations
Access Controls Revie% Inade"uate access definitions
Is
there an access >nauthori/ed access control policy in to data resulting in place compromise of confidentiality, #eview the procedure and for giving login $ availa!ility integrity access for new
a. Access control policy
users for domain $ server $ network, application systems, email systems, internet etc.,;
R is k s, C h e c kl is ts
#eview the procedures for deleting the login $ access for users who have resigned. #eview whetherthe parameters are updated for regular password changes, password restrictions alphanumeric, s m !ols
, A u di
1
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
Bhen was the last management meeting conducted Is
there login and system password !efore logging on to the operating
In!ormation Security &vents Management
Inefficient 'ecurity incidents management
Bere there any security !reaches that have taken place in the last one year hacking, data theft, we! attack etc.;
Managing !reaches recurrence events
security avoid of such
#eview the procedure how they are
82
'ecurity a. Incident details
-.serv/
ations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Format No: B/4.1.. Assignment Name
Assignment No Engagement Manager
Company Name
4.1. 8arketin Risks Review Checklist Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serva/
tions
#arget Fi'ation Inaccurate fi7ation targets
of
a. Check if targets are fi7ed for the marketing department is !ased on the annual sales plan
Inaccurate targets result in inade"uate plan for the marketing team.
!. #eview if targets are !roken into short term targets and are communicated to the marketing team
Identify if the marketing team is aligned to achieve the targets.
a. Annual 'ales )lan !. 'hort terms sales plan with targets
R is k s, C h e c kl is ts , A u di
0
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
c. Is the target revised !ased on analysis of actual performance. If there is a revision, is it approved !y the concerned authority
Marketing strategies evaluation Inappropriate marketing strategies
a. Is a marketing plan Inade"uate marketing developed for meeting plans resulting in the targets. insufficient market coverage and targets Evaluate achievements. the marketing strategies with respect to Analyse the trend of 2randing, marketing costs, Advertisement and under each strategy. marketing Analyse other deviations strategies. from !udget Is selection of agencies for advertisement and !randing, for media and pu!lishing is done !ased on evaluation of "uality parameters Is evaluation done for increasing
a. Advertisement spend details
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serva/
tions
etc from the market spends c. Evaluate the %ack of diversification following for of sales results in ensuring the single point failure. ade"uacy of marketing strategies: Is there a dependence on single customer. Calculate the proportion of sales vis < a- vis the customer
Is there dependence on single product. Analyse the product wise sales
Is
there
Customer Relationshi" Management Inade"uate Customer Information
a. oes the company maintain a customer data!ase. Is it manual$software !ased. Check for the following
Inade"uate on information customer results in inaccurate decisions.
Customer a. data!ase
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
in the data!ase:
Identify cases of inaccurate, Is the updation in and incomplete the data!ase unrelia!le data. made on a timely !asis. Are all the re"uired fields in the customer data!ase completed !y the sales team oes entire a!out
Inade"uate action on Customer 6eed!ack
it throw information the
Are Customer re3ections 6re"uent Customer captured separately and re3ection results in actions are effectively poor reputation of the taken on the same. company. Ensure if reason wise analysis is made and corrective actions are Analyse the re3ection cases and perform taken root cause analysis on cases of fre"uent re3ections Is customer feed!ack Customer feed!ack o!tained on companys collections helps in pro3ects$performance on designing the market
a. Customer re3ections summary
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ a fre"uent !asis steps taken improvement
*n(ormation Re,uired (rom Auditee
-.serva/
tions
and strategy and hence for needs to !e taken on a fre"uent !asis
Monitoring Inade"uate incentive system
Check the following for evaluating the performance measurement s ys tem of the marketing team:
Inade"uate monitoring of performance resulting in poor sales and employee motivation.
a. arget vis-a
a. Are targets set for every person in the marketing team
!. Incentive system and payment
R is k s, C h e c kl is ts
!. Are the targets !eing reviewed on a monthly !asis c. Is an incentive system designed for rewarding achievement of targets d. Are
vis
actuals compariso n
suita!le
, A u di
3
Manual on Internal Audit
Format No: B/4.1.3. Assignment Name
Assignment No Engagement Manager
Company Name
*..F 7rocess Risks Review Checklist Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
Indent Raising Process Inade"uate indenting system
a. 1!tain indents raised for the last one month and check the ade"uacy, authenticity and completeness of indents with respect to sanctioning authorities, desired information, cost !enefit analysis, !ack-papers etc.,
Indent raised without sufficient 3ustifications resulting in purchase of items not re"uired and financial there!y payouts
a. Indent s raised for a month !. elegation of Authority matri7 for sanctioning the indents c.'upporting documents
-servat ions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ !. 'tudy cycle time !etween receiving of an indent and raising of )1 and evaluate reasons in ( case of e7ceptional delays
elay in procurement of re"uired items resulting in production delays
c. Check if the re"uested item is as per the !udget or else authori/ed !y the designated authority
)rocurement without sufficient authori/ation resulting in purchases made without 3ustification
d. 0enerate an e7ception report on open indents for a long time with reasons and analy/e the root cause for such delays
elay in procurement of re"uired items resulting in production delays
e. Check if any indents have !een raised on an emergency !asis and ensure that they have !een authori/ed ade"uately
)rocurement without sufficient authori/ation resulting in purchases made without 3ustification
*n(ormation Re,uired (rom Auditee
-servat ions
a. )urchase 1rders raised for the re"uisitions !. )rocure ment !udget
a. %ist of open indents
R is k s, C h e c kl is ts , A u di t
(. he process for calculating the delays can !e done using CAA tools
5
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
Purchase (rder Process
5
Check if the procurement Inade"uate Inade"uate vendor selection of has !een made as per the selection resulting in )urchases policy of the the following:* vendors organi/ation. In case of a. )rocurement + non availa!ility of purchase at higher cost policy, for the selected !. )rocurement purchase orders verify the of su! standard following: "uality material a. At least "uotations c. 4endor not from three vendors competent to have !een o!tadeliver the ined for finali/ing service$material !. Check if the d. )ossi!ility vendor selected of has offered collusion with the !est rate vendors and c. 4erify the parathere!y not meters considered adhering to the for vendor selection evaluation of "uality policy of the product$service d. Check if ade"uate 3ustifications and authori/ation e7ist
*>se of CAA tools is recommended for generating e7ceptions +E7ceptionally high cost of procurement needs to !e recorded in the 6inal generation of E7ceptions report
56
a. )rocurem ent )olicy !. 4endor selection documents c. elegation of Authority Matri7
-servat ions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ e. Check if negotiations have !een made for !etter terms of purchase
*n(ormation Re,uired (rom Auditee
-servat ions
a. Agreement !etween the company and the vendor
f. Check if authori/ation for the purchases as per the elegation of Authority defined !y #eceipt of the organi/ation material$service not #eview the agreement with as per the terms and the vendor and check if the conditions agreed terms and conditions are upon met for the material$service
5
Check if there is any process for annual vendor evaluation and the performance of the vendor !ased on "uality, timely delivery, compliance with terms and conditions etc are evaluated Inade"uate 1rdering process
0enerate list of )urchase elay in procurement 1rder not serviced on time leading to production and ascertain the reasons delays for the same. Compare the )1 date and 0#$service receipt note date and ascertain the delays
51
a. 0oods delivery$service receipt note
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en% 'tatutory non compliance
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ In case of imports check if the statutory regulations vi/. customs regulations, 6EMA regulations etc are complied with
'tatutory Non compliances resulting in penalties and offences under various regulations
'tatutory Compliance s Checklist
*n(ormation Re,uired (rom Auditee a. Copies of payment challans and returns filed
)endor $atabase Management Inaccurate vendor data!ase 5
1!tain the dump of vendor )urchases made data!ase and analy/e for from fictitious the following: vendors not supported !y a. uplicate vendor physical delivery and codes resulting in payout to !. uplicate vendor the company names c. Inaccurate updation of vendor details vi/. item $service supplied, rate, terms of delivery etc !y comparing it with the agreement
a. 4endor data!ase dump !. Agreeme nts with vendors c. )urchase orders to the vendor d. 0oods receipt note$servic e delivery note
d. Access to the vendor data!ase to unauthori/ed person persons in departments other than
92
-servat ions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Format No: B/4.1.. Assignment Name
Assignment No Engagement Manager
Company Name
4.1. 7roduction Risks Review Checklist Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
5
*n(ormation Re,uired (rom Auditee
-.serva/
tions
Production Planning Process Inade"uate )roduction )lan
a. Is there a 2ill of Material :21M; availa!le for the production
Inaccurate estimation of re"uirements results in unnecessary !. Check the purchases. process for evolving the 2ill 1!tain list of very of Material old items in the c. Are the purchases made according to the 21M. Check for an order, of the purchases
a. 2ill of Material
inventory and ascertain the reason for not using the items and against which 21M the purchases were
R is k s, C h e c kl is ts , A u di
50
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
5
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ relia!le and accurate. Check for modifications if any in 21M for similar orders and o!tain the 3ustification for the same
made.
a. Is production plan reviewed on a fre"uent !asis for making necessary ad3ustments
Inade"uate review of the production plan resulting in production inefficiencies.
!. Is the cycle time from #aw material charging to finished goods calculated and evaluated
*n(ormation Re,uired (rom Auditee
Check the overtime payments made and analy/e the reasons for working overtime. Check if the overtime was pre planned or was it in the process of production.
#eview the minutes of the meeting relating to production reviews and check if decisions made in the meeting are implemented.
a. Minutes of meeting for production review
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serva/
tions
Ra% Material Charging Inade"uate controls on raw material charging process
5
a. Are the raw materials charged as per the production plan
Inaccurate charging of raw material resulting in "uality mismatches.
a. )roduction )lan !. #a w Material charging checksheet if any
!. oes a review happens to ensure that the correct "uality and "uantity of raw material for the !atch is charged c. Are safety procedures complied with in case of
Inade"uate "uality check
a. I s the raw material certified for "uality prior to charging
Inade"uate "uality check results in inade"uate "uality of the final product !. Check for leading to customer "uality clearance re3ections. f or t he items introduced Calculate the into the percentage of
a. ualit y clearance certificates !. ualit y checklist c. Custo mer re3ecti ons
5
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
checklist used !y the "uality department for checking the "uality parameters at this stage.
re3ection at the raw material stage and ensure if the procurement department has taken it up with the d. 4erify if the checklist supplier for claims if is !eing filled up any. accurately and completely for every Identify the cases of input of material customer re3ection and ensure if it is due to raw material "uality.
5
Compare the production "uantity deviations due to low "uality of raw material.
*ine Processes Inade"uate review of line activities
oes the production happen as per the defined procedure. Ensure the following for evaluating the efficiency of line processes: a.
Are
line
activities
)roduction not carried out as per the procedure. Check on "uality re3ection in line and calculate the
a. ocuments showing output of line activities
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serva/
tions
percentage of such re3ections and fre"uent reasons !. Is the output at for the same. process each and recorded signed off supervised at each stage
c. Are transfers within internal processes ade"uately documented and 5
Inade"uate re3ections$rewo rk Management
a. Are the re3ections$damages wastages and ade"uately recorded
Non monitoring of re3ection and damages resulting in material leakages.
a. #e3ections$ damages records
!. Is the physical stock sent to raw material )hysically verify if warehouse the material is c. Is over and availa!le under consumption calculationsmade and reviewed !y the production de artment Inade"uate Machinery
Check if the e"uipments and machinery used in
)roduction down time due to
a. )reventive Maintenance
53
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en% Maintenance
Audit &te$s to 'eri()
Auditor
Checklist
Audit
&te$ the lines are maintained machinery !reakdown ade"uately. Is there a preventive maintenance schedule evolved and adhered to !y the company
#eview the instances of machinery !reakdown and time taken to rectify the same and the num!er of times the instance has recurred
Identify the key utilities re"uired for the production process and ensure if the company has ade"uate !ack up for shortage in supply of utilities.
Non availa!ility or inefficient usage of utilities resulting in down time
5
Non availa!ility of utilities
*m$act Anal)sis
+ime (or
*n(ormation Re,uired (rom Auditee 'chedule !. E"uipment failure details
a. )roduction down time details
Identify instances of down time due to non availa!ility of Also ensure if records key utilities and the are maintained showing actions taken for utili/ation details of key ensuring utilites continuous supply of the same Inade"uate a. Is the output in the Inade"uate "uality "uality check in line certified for check results in
a. uality clearance
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
the lines
"uality prior to passing it to the ne7t process or to the finished goods warehouse
inade"uate "uality of the final product leading to customer re3ections.
c. Custo mer re3ecti ons d. )ending claims
Finished Goods Management Process a.
tions
!. ualit y checklist
d. 4erify if the Compare the checklist is production "uantity !eing filled up deviations due to accurately and low "uality of output
Inade"uate storage of finished goods
-.serva/
certificates
!. Check for Calculate the "uality clearance percentage of f or t he re3ection and output "uantify the c. Check t he financial !urden process checklist used !y the "uality Identify the cases of department for customer re3ection checking the "uality and ensure if it is parameters at this due to processing "uality. stage.
5
*n(ormation Re,uired (rom Auditee
Are the finished uality re3ections goods stored in a due to improper safe location prior to storage transferring it to the warehouse
a. uality re3ections
55
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
1
Audit
&te$ Check for instances of "uality re3ections due to damage to material after production and prior to transfer to packing section
Inade"uate procedure for packing and la!eling of material
Checklist
+ime (or
Check for controls adopted during the packing and la!eling process to ensure the following:
uality re3ections < internal and e7ternal due to inade"uate packing and la!eling.
Containers used for packing are Identify the reasons correct for re3ections and he "uantity of evaluate the action taken for avoiding material packed is recurrence of the same. accurate agging of the final product to the !atch is made accurately %a!elling is done as per the standards defined
166
*n(ormation Re,uired (rom Auditee
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Format No: B/4.1.5. Assignment Name
Assignment No Engagement Manager
Company Name
4.1.5 &ales and dis$atch Risks Review Checklist Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serva/
tions
1
Sales Plan Inaccurate fi7ation targets
a. Evaluate the process of adopted for making annual sales plan. Check the following:
Inaccurate targets result in inade"uate plan for the marketing team.
Is the annual sales plan prepared after consideration of performance in the previous period
Identify if the marketing team is aligned to achieve the targets.
Bhat are the aspects analy/edfor preparation of plan and are they ade"uate
a. Annual 'ales )lan !. 'hort terms sales plan with targets
R is k s, C h e c kl is ts , A u di
161
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
Is the annual sales plan approved !y the concerned authority Is the sales plan made for all the products and locations of the company =as
it
!een
(rder +ooking and $elivery
1
Incomplete$ina ccurate orders !ooked
#eview the process of #isk of delivery order !ooking and verify without !ooking of the following: orders. a. Are the orders !ooked completely. Check if all the calls as updated in the customer call data!ase is !ooked. If not ascertain the reasons for non conversion of the order
Evaluate the monitoring system for customer calls, follow up and closure and identify points of control lapses leading to non !ooking of orders.
!. Compare the date of call and date of order and identify
10
a. 'ales 1rder copies !. Cus tom er call informat ion
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en% Mismatch !etween orders and delivery
1
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$ a. 4erify if the delivery is supported !y sales order !. Ensure that the delivery is monitored and authori/ed
Customer re3ections due to inade"uate delivery.
Check for instances of re3ections from the customers and analy/e the reasons c. 4erify the controls the same. ascertaining for for Calculate the that the monetary impact, material has to repeated actually reached the due customer. oes t he dispatches or wrong person delivering the dispatches, damages goods carry during transportation the etc. acknowledgement copy from the customer and is it checked. d. 4erify if there are any delays in delivery !y comparing the call closure, order and delivery e. If the delivery is outsourced to an agency, analy/e
160
*n(ormation Re,uired (rom Auditee
-.serva/
tions
a. eliv ery 1rde rs !. Customer acknowle dge ments c. Custo mer re3ecti ons
R is k s, C h e c kl is ts , A u di
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
f . Analy/e the logistics arrangements and identify areas of duplication, inefficiencies etc
Invoicing Inaccurate invoicing
1
a. Check if the invoices are serially controlled and identify duplicate, cancelled or missing invoices if any !. Check if the invoices are prepared at the right price for the right material. If the invoices are system generated, check the applicationlogic for rate and material$services selection c. Check if there has !een any delays invoicing !y comparing
Inade"uate invoicing results in direct revenue loss for the company. Identify cases of inaccuracies and delays and calculate the revenue lost due to the same.
a.
!.
Invoice #egiste r 'ales orders and delivery notes
-.serva/
tions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-.serva/
tions
invoiced e. Are the invoices aut hori/ ed ! y t he designated person
Collection Process Inade"uate controls collection process
1
in
Check if the collection is made !y the marketing team. If yes evaluate the following: a. Are ade"uate controls designed in the collection process to ensure that there is no leakage at the point of collection and remitting it to the company !. Are cash collections disallowed, if allowed is it supported !y suita!le documents c. Is there a possi!ility for collusion !etween the marketing team
Inade"uate result in leakage.
controls revenue
Assess the trend of collections, check if they are as per the terms and conditions and is there any possi!ility for rela7ation in the cycle
a. Ageing report !. Collecti on summ ary
R is k s, C h e c kl is ts , A u di
16
Manual on Internal Audit
Format No: B/4.1.16. Assignment Name
Assignment No Engagement Manager
Company Name *..G
H
&tatutor) Com$liances Review Checklist
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
Central &'cise Act 1
oes the e7cise registration certificate cover all chapters$su!headings$products Is
the storage ground plan approved !y the E7cise #ange superintendent
a.
E7cise #egistration Certificate
!.
#0&( #egister
c.
E7cise #eturns
=as notice of the last change in the unit head !een given to E7cise authorities Are the E7cise authorities informed a!out the pre-authenticated serial nos. of invoices
Hhe Checklist is inclusive and is su!3ect to change as per the changes to the 'tatutes. he checklist can !e used as an indicative checklist and is not final.
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
Are duplicate for transporter copies of e7cise invoices availa!le for all consignments entered in #0&( register for receipt of goods from plants or other Is the #0&( register maintained properly consignmentwise; and always kept upto date o physical stocks reconcile with !ook stocks as shown in #0&( register as on the date of report 1
Are e7cise returns filed !y the Gth of the su!se"uent month
Income #a' Act a. ' Challans
=as the unit made any cash payments for e7penses a!ove #s &GGGG
!. ' returns
=as the unit paid loans $ advances $ deposits in cash a!ove #s &GGGG =as the unit received loans $ advances $ deposits in cash a!ove #s &GGGG
R is k s, C h e c kl is ts , A u di
if yes, then has the unit o!tained the )AN num!er and address of the party
163
Manual on Internal Audit
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
Is ta7 !eing deducted at source at correct rates on all payments lia!le for deduction of ta7 at =as ' remittances and returns made as per the due date
Services #a' 4erify the #egistration of the assessee with the 'ervice a7 Commissionerate Bhether separate regn. taken for each service provided 1
Check the opening credit of the current year and closing entries of the previous year Check whether the ta7 invoice is proper and mentions the #egn. No. of the assessee, 'eparately mentions the rate of ta7 and amount of ta7. 6rom samples of the !ills raised for collecting Check whether the ta7 invoice is proper and mentions the #egn. No. of the service provider and 'eparately mentions the rate of ta7 and amount of ta7. 6rom samples of t he !ills receiv ed !y the assessee from service
*n(ormation Re,uired (rom Auditee
-servations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
If the rates applied are different, t ake a copy of the authority$notification under which such change is approved. E7. Composition, Check whether month wise statement of service ta7 account receiva!le$paya!le matching with the monthly payments of service ta7.
1
Check whether the service ta7 has !een deposited with in the due dates Check =alf early returns filed. ally it with !oth the monthly payments and as well as the ledger entries as the relevant dates.
R is k s, C h e c kl is ts
#eview the return and see whether the return is accurate as to, input credit, output ta7 paya!le, valuation of services, carry forward of credit, etc. Check the Correspondence if any withthe epartment and its compliance and impact.
, A u di
165
Manual on Internal Audit
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
Sales #a' Act )alue Added #a' Central Sales #a' Act #egistration Certificate
oes the esta!lishment have registration certificates for %' and C'
'ales a7 Challan 'ales a7 #eturns
=as the unit included additional godown $ seasonal godowns as additional places of !usiness in the sales ta7 registration =ave all the products handled !een declared in the sales ta7 registration certificates 11
Is the %' and C' certificate prominently displayed at the unit and additional godowns =as sales ta7 !een charged on sale of assets at correct rates Are the records, re"uired to !e maintained for 'ales a7$ Income a7 purposes availa!le at the location =as the unit reconciled the variance !etween the sales ta7 paya!le as shown in !ooks of accounts E#); and the amount actually
116
-servations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
maintain oes the unit acknowledged 'ales a7
oes the unit deposit sales ta7 dues duly within due dates oes the unit file the sales ta7 returns duly within due dates
&SIC Act Is the unit registered under E'IC 11
E'I Challans of !oth company $ contractor
Employees drawing wages e7cluding overtime; less than or e"ual to #s F+GG$- are covered under the Act.
E'I #eturns of !oth company$ contractors
&. If not covered under E'IC, Borkmen Compensation Act will apply.
E'I Compliances 6iles 4arious forms filed with E'I authorities;
If security contractors have !een registered separately, then are the copies o!tained from them and kept in safe custody =ave declaration forms 6orm ; and return of declaration form 6orm (; for new employees !een su!mitted immediately on their day of 3oining
R is k s, C h e c kl is ts , A u di
111
Manual on Internal Audit
Audit &te$s to 'eri()
Auditor
Checklist
=as the unit preserved all E'IC payment challans and returns =as the unit maintained an Accident register 6orm +; =as the unit reported all reporta!le accidents i.e. which prevent an employee to report from duty for a period greater than *J hours; to the E'IC authorities vide Accident #eport 6orm H availa!le in the Act; 11
=as the unit maintained 6orm-F register showing monthly E'IC contri!utions and all the details of employees covered under the E'IC Act he Company or the contractor, in case he has his own code, needs to maintain 6orm F; =as the unit maintained E'IC #ecords for previous years no ma7imum limit; as inspection can !e carried out !y authorities at any time. =as the unit deposited E'IC monthly contri!utions !oth employer and employee; !efore &st of the ne7t month
11
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
=as the unit filed E'IC half-yearly return in 6orm-H within *& days of the half-year ended 'eptem!er (G or March (, as
-orkmen.s Com"ensation Act =as the unit filed the annual return under Borkmen?s compensation Act within the due datesK his act is not applica!le to those
Minimum -ages Act
11
=as the unit displayed a copy of the A!stract of the Minimum Bages
R is k s, C h e c kl is ts
=as the unit displayed the notice containing the minimum rates of wages applica!le Is minimum wages paid to contract la!our $security personnel, in the presence of company employees =as the unit filed the Annual returns under Minimum Bages act
, A u di
110
Manual on Internal Audit
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
Payment o! -ages Act oes the unit appropriately maintain records records specifying specifying names names of employees and wages paid to oes the unit prominently display the a!stract of payment of wages act and rules =as the unit filed Annual Annual returns under under )ayment )ayment of Bages Bages Act N-+ A77L*CABL9 F-R N*+& *N 8A#ARA+RA 11
Pro!essional #a' oes the unit maintain acknowledged )rofession ta7 challans =as the unit deposited the monthly profession a7 within the due dates ime period for the payment of ta7 is 'tate specific ; =as the unit filed )rofession a7 returns within due dates =as the unit paid company profession ta7 within due date
*n(ormation Re,uired (rom Auditee
-servations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
Sho" and &stablishment Act Is the 'hop and Esta!lishment #egistration certificate valid as on date Is the 'hop and Esta!lishment registration certificate prominently displayed =as notice of the last change in the unit head !een given to 'hop and Esta!lishment authorities 11
=as the unit su!mitted weekly holidays and daily worki working ng hour hours s Inspector under 'hop
notice of notice of to the the and Est!
R is k s, C h e c kl is ts
=as the unit displayed a copy of the notice notice of daily daily working working hours hours su!mitted to the Inspector under 'hops and Est! Act Is the name and address of the local la!our inspector displayed as per 'hop and Est! Act oes the the unit unit main mainta tain in an inspection !ook for visit remarks of the of the Inspector
, A u di
11
Manual on Internal Audit
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
oes the unit maintain a muster register as per 'hop and Est! Act for all company and contracted employees Ar Are the employee leave cards maintained and updated as on
Payment o! +onus Act oes the unit maintain payment of 2onus register
Payment o! Gratuity Act 11
=as the unit su!mitted notice of opening of esta!lishment 6orm A; under the 0ratuity Act to the Controlling Authority within (G days of starting of the unit Note: his point is applica!le =as the unit prominently prominently displayed the a!stract of )ayment of 0ratuity Act 0ratuity Act =as the unit intimated any change in the unit head or address of unit to the Controlling Authority in =as the unit displayed the name of Companys officer authori/ed to receive notices under the Act
*n(ormation Re,uired (rom Auditee
-servations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
Contract *abour /Regulation and Abolition0 Act Is this Act applica!le to the unitK =as the unit o!tained #egistration Certificateunder the Act for engaging Contract %a!ourK
11
oes the unit maintain #egisters of Contractors containing all all the names of Contract %a!our staff fromvarious contractors;, the nature of work performed !y the contract la!our and the rates of wages paid to contract la!ourK Are the wages to contract la!our la!our staff paid in presenc presence e of management representative CompanyK
R is k s, C h e c kl is ts
=as the unit displayed the a!stract of the Contract %a!our =as the company entered into legal agreement with the ContractorsK =as the unit principal employer; filed annual returns under the
, A u di
=a =ave the Contractors o!tained %icense under the ActK
113
Manual on Internal Audit
Audit &te$s to 'eri()
Auditor
o the Contractors renew their %icense every yearK =ave the Contractors taken a separate code num!er for )6 and E'I coverage and contri!utions are remitted o the contractors maintain following:
11
Muster #oll
#egister of Bages
#egister of eductions
#egister of 1vertime
#egister of 6ines
#egister of Advance
the
Are the Contractors keeping the regis ters$records relev ant t o the employment within ( kms nearer to the work placeK =ave the >nit displayed notice showing rates of wages$hours of work$wage period$date of payment of wages$date of payment of unpaid wages and the name and address of the Inspector having 3urisdiction
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Audit &te$s to 'eri()
Auditor
Checklist
+ime (or Audit &te$
*n(ormation Re,uired (rom Auditee
-servations
=as the Contractors issued Employment Card$Bage slips to their workersK =ave the Contractors filed =alf yearly returns under the ActK o the Contractors issue 'ervice Certificate to their workers on terminationK
11
R is k s, C h e c kl is ts , A u di
115
Manual on Internal Audit
Format No: B/4.1.11. Assignment Name
Assignment No Engagement Manager
Company Name
*.. Administration Risks Review Checklist Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
1
*n(ormation Re,uired (rom Auditee
Facilities Plan Non availa!ility of administration plan
Check if facilities plan is made !ased on Annual 1perating )lan Check if it communicated ade"uately
is
Inade"uate plan resulting in inade"uate purchases and non availa!ility of relevant the facilities on time
Annual perating )lan 6aciltiies )lan
Check if the administration department has an internal procurement plan generated for the approved
126
-servat ions
M a n u al o n In te rn al
Risks, Checklists, Audit Programme
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
-servat ions
Security Functions Inade"uate selection and monitoring of security functions
1
#eview if the 'ecurity functions are managed in house or outsourced. If outsourced, check the ade"uacy of evaluation done for selection of F security persons
Compromise to physical security aspects due to wrong selection of guards
#eview the security >nauthori/ed entry process and ensure the and e7it resulting unauthori/ed following: in access to the a. oes the and 'ecurity 0uard company companys down note resources. details of all
a. 4isitors #egister !. I nward 0ate )ass c. 1utwar d 0ate )ass
persons employees$visitors; moving in and out of the company premises
d. 4isitors passes e. Inwardand 1utward #egisters
!. oes the 'ecurity stop and check the visitors and understand the purpose of visit !efore lettin them Fhe risk involved in outsourcing activity is not included as a part of this checklist.
121
R is k s, C h e c kl is ts , A u di t
Manual on Internal Audit
Risk Listin !"hat "ron Can #a$$en%
Audit &te$s to 'eri()
*m$act Anal)sis
Auditor
Checklist
+ime (or Audit
&te$
*n(ormation Re,uired (rom Auditee
d. Is the movement of material monitored !y Inward 0ate )ass and 1utward 0ate pass
ouse 1ee"ing Inade"uate house keeping
1
#eview if the house keeping functions are managed in house or outsourced. If outsourced, check the ade"uacy of evaluation done for selection of persons undertaking housekeeping activity Check the following: a. oes the housekeeping function have a checklist for their activity !. Is their activities monitored
=igh spending on keeping house without a !udget resulting in inefficient utili/ation of funds.
a. =ousekee pin g Checklsit !. =ousekee pin g costs !reakup
Analy/e the trend in house keeping c. Is the cost of cost. Compare the as a house keeping high cost percentage of total d. Is the house cost and sales and keeping material comment if it is on kept under a higher side safe custod
c. =ouse keeping staff attendance
122
-servat ions
M a n u al o n In te rn al