1. EXECUTIVE SUMMARY 2. INTRODUCTION Literature Review Global Oil & Gas Industry Overview Indian Oil & Gas Industry Overview Company Overview (ONGC) 2 4 6 6 20 23 24 26 28 38 39 40 41
3. INTERNAL CONTROL & INTERNAL AUDIT Internal Control Internal Audit Standards on Internal Audit 4. PROJECT PROFILE Objectives Research Methodology 5. LEARNINGS & OBSERVATIONS Learnings Audit Scope & Coverage Organisation Structure of IA Department Audit planning & process Audit approach & methodology Life cycle of an audit Performance evaluation Quality systems
42 43 44 46 47 50 52 54 58 59 61 62
Observations Recommendations Learning outcome 6. REFERENCES 7. ANNEXURE
The word „Economic Recession‟ has become a very common one during the present year. The major reason for this being fall of American majors like the Lehman Brothers, etc. From the time of fraud by Enron, the fall of these American majors and to the most recent, our own Satyam the major reason has been lack of corporate governance in the organisations. Despite such things coming in to picture there are still many organisation which are being run successfully with a very effective and responsible corporate governance practices in their organisations. ONGC can be named as one of them. Being such a large and multi - locational organisation ONGC is still very efficiently and effectively running. It has very well planned and structured internal control system which helps in the smooth running of the organisation. The efficiency of the internal audit at ONGC has been proved by the ISO certification achieved by the Internal Audit Department of the organisation. The project was to attain a complete understanding of the audit set up, plan, process, procedures, execution, winding up and reporting at the organisation. With cases like Satyam coming up, the statutory requirement by SEBI has made it compulsory to abide by the Clause 49 of the Listings Agreement. Apart from this the ISO certification has made a few requirements in the audit work to maintain effective audit wok and processes. The implementation of the ONGC Audit Manual and the ISO has brought about a nuber of changes in the audit setup and procedures in the organisation. An understanding of the changes from before and after theses implementations has been made. This qualitative kind of research in the project has been mainly focussed on the learning of the audit procedure sin the organisation.
Emily Holbrook, 2009, in his article “Tough times for internal audit “ explains the role of internal auditing is facing continuing challenges in today's economic climate, according to PricewaterhouseCoopers' "State of the Internal Audit Profession Study," which states that the profession must brace for an efficiency revolution as it works to find ways to produce more with less staff--a tactic more and more companies have been trying to master. "Internal audit department leaders are facing unprecedented challenges and many are hard pressed to maintain coverage at a lower cost," said Jim LaTorre, partner and U.S. internal audit services leader for PwC. "Yet among the challenges are opportunities to raise the bar and find creative and cost-effective solutions to transform the internal audit function and bring increased value to the organization and its stakeholders." Only 13% of the 700 internal auditors who responded to the study indicated that their departments allocated at least 25% of resources to strategic and business risk, while 57% assigned the same amount of resources to more traditional financial risk. "Business and operational risk categories are the areas of highest risk, however internal audit departments are not focusing on these issues," said Peggy Hardek, study co-author and internal audit services partner with PwC.
Mike Nolan , 2008 , in his article “Internal audit at the...