Audit Program

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ABCD 1234 AND COMPANY WLL Corporate Office|
To: Head – Procurement & StoresCC: | From : Head – Internal Audit| Report No| Date : |

* Subject: Audit Report on Operations of ABCD 1234 AND COMPANY WLL. We have done general operations audit of ABCD 1234 AND company WLL from 1.11.2012 to 20.11.2012 and submitting the draft audit report below..

Executive Summary:
* There is no ABC analysis of the suppliers have been done by the company ( Refer finding # 1). The Purchasing Department has not carried out an ABC analysis for suppliers and articles. As a result purchasing activities are not focusing its activities on the right suppliers and articles. Local purchases are done with only one supplier and overseas purchases are done with just two suppliers. The lack of a focused approach could result in efforts not being spent in areas where the potential for savings is greater. * Finding – There is no facility to check the physical stock with system stock. ( Refer finding # 2) We were informed that the inventory system is not in operation for the past two months due to the computer virus. Hence we could not verify the physical stock with system stock

* Finding – There is no evidence of risk management activities in purchase department. ( Refer finding # 3) We were not provided with evidence to substantiate that risk management activities are carried out in the purchasing area. Few instances where risk analysis may be required and beneficial in identifying mitigating factors are: * Dependence on single source supplier for local purchases. * Dependence on two supplier for overseas purchases.

* Change in government rules and regulations for imports etc. * Finding – There is no evidence of risk management activities in purchase department.( Refer finding #5 ) We were not provided with evidence to substantiate that risk management activities are carried out in the purchasing area. Few instances where risk analysis may be required and beneficial in identifying mitigating factors are: * Dependence on single source supplier for local purchases. * Dependence on two supplier for overseas purchases.

* Change in government rules and regulations for imports etc. The detailed observations along with the action sheet are below.

Head – Internal Audit

Contents
Subject: Audit Report on Operations of ABCD 1234 AND COMPANY WLL.1 1Purpose3
1.1Purpose of the audit3
2Background3
2.1Procedure followed for the audit.3
3Purchase3
3.1General Overview of Purchasing Activities in 20123
3.2Suppliers Analysis – ABC Analysis4
3.2.1ABC Analysis for ABCD 1234 and company WLL4
3.3Payment to suppliers6
4Finance7
4.1Creditors.7
5Sales8
6Investments9
7Payroll9

Purpose
Purpose of the audit
The purpose of the audit is

1. To verify the accuracy of the financial records of the company. 2. To evaluate the internal controls of the company.
3. To support the value of stock shown in the balance sheet by physical verification. 4. To discuss the possibility of fraud, theft or loss.
5. To reveal any weaknesses in the system.
Background
Procedure followed for the audit.
* Audit period for this audit is 1.1.2012 to 31.10.2012
* This audit is a planned audit.
* Formal TOR ( Terms of reference) has been issued to the auditee on 15.10.2012. * Data request has been submitted to the auditee.
* Field work is done from 1.11.2012 to 20.11.2012
* Close out meeting has been conducted with the auditee on 20.11.2012 Purchase
General Overview of Purchasing Activities in 2012
The following table gives a general overview on the purchasing activities: Table 5: General purchasing figures (Jan 2012 to Oct 2012)
| Total | In %|
Number of suppliers used in 2012| 3| 100%|
Thereof internal | 0| 0%|
Thereof external| 3| 100%|
Articles in material master| xxxx| -|
Purchasing system |
Number of...
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