Professional Documents
Culture Documents
I General: Internal Audit Checklist
I General: Internal Audit Checklist
I General
A Permanent Information
Name of Auditee -
Organisation Type -
Period under Audit -
Unit Head -
Audit Team -
B Documentation
1 Proper filing of all documents
2 Proper coding of all files
3 Proper indexation of all documents in each file
4 Original documents related to land, building, fixed asset and vehicle etc are
kept in the custody of the Unit Head.
5 Unit head ensures proper security and safety measures for original and
important documents to avoid theft, fire, rain or any other peril of whatsoever
nature.
6 All important documents and correspondence are stored in soft format (PDF-
Scanned Format) with proper listing
C Secretarial
1 All the secretarial documents and the documents related to Registrar of
Companies (ROC) are kept at the registered office of the Company.
2 All types of resolutions to be passed are drafted by the Secretarial department
only.
3 The original signed copy of the resolutions passed are kept by the secretarial
department at the registered office and the copy of the same are sent to the Unit
Head for his records.
4 It is the responsibility of the Unit Head to intimate all the concerned
departments about the change in designations or change in directorship /signing
authorities or any other relevant change that need to be informed time to time
on behalf of the company.
5 Minutes book and statutory registers to be kept and updated by the Secretarial
staff. at the registered office.
D Safety And Security Measures
1 Fire safety measures such as fire extinguishers, fire alarms and sign boards for
“NO SMOKING” zone are kept
2 Doctor, Fire brigade, Police, bus and railway inquiry and higher management
contact numbers are displayed at each desk.
3 A list of phone numbers of all the employees is displayed at each desk.
4 First aid kit is kept at easily accessible places
5 All the drawers are properly locked and a bunch of duplicate keys is kept with
the unit head.
6 Safety training to labour and official persons.
7 Emergency medical training to staff by doctors.
8 Detail of Work stations is displayed at each desk in a proper format so that the
complete information about the employees' name & designation can be shown.
9 Hardware security- no person is allowed to carry the system or take files from
the system with prior permission of Immediate Boss.
10 All the important files/documents kept in soft copy is secured through unique
file password.
E Legal
1 All the original documents related to Intellectual Property Rights (IPR) i.e.
Trademarks, copyrights, patents, ISO certificates. are kept with the Unit Head.
2 The original documents, notices etc filed by the legal advisor / advocate are
kept by the Unit Head.
3 The proceedings of the same are summarized by the Unit Head with proper
attachments and account statements.
4 Listing and documentation of legal and IPRs files is done as per points
mentioned under Heading- DOCUMENTATION.
A REQUIREMENT ASSESSMENT
Check that details relating to manpower requirement is informed to the
management “1month” well in advance.-
• No. of Executive required
• Kind of Executive required
• Qualification required
• Experience
• Salary Slab.
B Interview
1 Check that interview is taken by a committee appointed for the purpose,
comprised of minimum three members-
• One Functional Head – Respective departmental head.
• One Higher official – Unit Head
• One HR Manager /Executive
2 A proper form provided by the HR Executive is duly filled by the candidates.
3 The interview is conducted at Unit level for first phase and the short listed
candidates are interviewed by the higher management for final phase.
C Letter Of Offer
Offer letter is given to the selected candidates within 2 days for their acceptance
D Appointment
Check that
1 Appointment letter is given within 3 days of joining.
2 Personal data form/Service book is filled within 3 days of joining.
3 Terms and conditions associated with appointment presents a clear picture.
H Attendance
1 Daily attendance is taken either in morning or evening in Attendance Register
J Leave Procedure
Various leaves taken by employees are classified in Paid, Casual, Sick and are
allowed as per the HR Policy
K TERMINATION/RESIGNATION
Proper notice or salary in lie thereof before resignation/termination as per HR
Policy
L GRIEVANCE HANDLING
1 Any grievance relating to workplace is informed to immediate bosses or the
concerned unit head who further reports it to the higher management.
2 Reporting is done both in verbal and written format.
M EMPLOYEE RECREATIONAL POLICY
1 After completion of 18 months of service, promotion or hike in salary on the
basis of performance appraisal and as per management decision.
2 Bonus amount would be calculated/decided depending upon the employee
performance and at the discretion of management.
3 Employees should submit Self Appraisal Performance Report on quarterly
basis.
4 Employee birthdays and anniversaries is given due consideration one Greeting
card should is sent on behalf of the Company.
5 A suggestion or a compliant box is kept and it is the responsibility of the HR
Department to check the same and reporting of the same to the unit head.
N REIMBURSEMENT OF EXPENSES
Expenses are reimbursed to the employees incurred for official purposes as per
the decision of management committee.
INTERNAL AUDIT CHECKLIST
III Purchase & Inventory Management
A Material Control
Check proper records for-
1 Availability of materials JB
2 Control over the investment in material JB
3 Reasonable Prices JB
4 Wastage Control MS/JB
5 Control over the spoilage and obsolescence MS/JB
B Purchase
1 There should be at least two personnel for the purchase department with rights AM/JB
and duties as per the Purchase Policy
2 All the purchases are properly authorised as per the policy
Upto Rs 5000/- Purchase Manager
Revenue purchase > Rs 5000/- Unit Head
Capital purchase > Rs 25000/- BOD
C Requirements
1 Requirement of the Stores Department is in accordance with the production
schedule and on the basis of need of the particular item whether it is capital or
revenue item is forwarded through Purchase Indent in 2 copies
D Vendor Registration
1 The Purchase department registers the potential suppliers according to the
required items in the prescribed format.
2 Check proper maintenance by Purchase manager of master list of the suppliers
G Purchase Order
1 PO is prepared in 2 copies in the prescribed manner and is duly authorised
J Stores/Inventory Management
1 Proper counting of the material received and recording and classification of the
same.
2 After receiving of the required material the invoice should be supported with
the Material Inspection Report and sent to the accounts department.
3 Proper authorization and verification of the MIR by the purchase manager as
well as the higher authority.
4 Control measures i.e. stock taking & supervision of the material received
should be done on periodic basis (Monthly / fortnightly / weekly).
5 Separate authority for purchase and stock taking.
6 Continuous stock verification.
7 Shortage/excess of the material is reported to the purchase as well as the
production department.
8 Any discrepancies / damages must be recorded and reported to the concerned
authority.
9 There should be a proper control over the Scrap / Wastages / Damages/
Defectives etc.
M Inventory Records:
1 Daily Updation of Stores Ledger
2 Check Stores Ledger for proper stock keeping, recording material receipts,
issues and balances
3 Issue of material from stores in proper format
4 In case of material transfer from one job to another job, the material transfer
note will be prepared in 2 copies
5 Scrap / wastage should be recorded and reported in a proper format
T CHECKLIST
Remarks
A General
Check that
1 Proper reporting is done by assistants to respective division in charge & further
reporting by in charge to immediate boss
2 Proper listing of products with their respective codes and brand names
3 The record for no. of labour required to work at each machine for standard
production is maintained as per given format
4 Calculation of idle time is done on percentage basis and in case the idle time
exceeds 25% the reporting of the same to the higher management on
daily/weekly basis with proper reasons
5 Calculation of overtime and recording of the same is done by the Production
Manger and he further reports it monthly to the Unit head and the HR
coordinator of the unit.
6 The total area covered by the production floor with its utility including storage
for raw and finished goods is recorded in prescribed format.
B Machinery
Check that
1 Fixed Assets Register is maintained & updated in the prescribed format
2 Proper coding for each capital asset
3 New Machinery-
a The requirement of new machines can arise due to following reasons:
· Increase in demand
· Change in technology
· Change in product line
· Increase in production
b Proper assessment is done by Production Manager/In charge approved by the
Unit Head
c Requisition to the purchase department is sent for further processing as per
purchase and inventory policy of the Company based on Quotation Analysis.
d The new machines is properly installed in supervision of the Technical person
and the Unit Head and the reporting of the same is done to the higher
management after installation.
4 Capacity Analysis of machines is done in the prescribed format
5 The upkeep and maintenance of machine is done on regular basis so as to
increase their life and proper track of the machine overhauling is maintained in
the prescribed format.
6 Separate machine log book is maintained and updated
7 User manual/instruction kit of machines is displayed through charts and
hoardings at various places of factory.
8 Machine maintenance chart is displayed and updated for each machine near by
the machine itself.
9 Proper reporting of machine breakdown/shout down is done by production in
charge to unit head with valid reasons
10 Shut down for more than 3 hours is reported to Unit Head which further
reports to higher management
C Raw material
Check that
1 Need assessment is done by the Store-keeper and the authorization is done by
the Production Manager/In charge.
2 Purchase of raw material is done as per the Purchase Policy
3 The Quality Controller properly verifies the quality of the raw material by
taking samples and records the same in prescribed format.
4 In case the quality of the raw material is not of good quality, the reporting of
the same is done to the Unit Head and higher Management .The whole lot of
raw material is stored separately and Material Return Form is filled by the
Store keeper, duly verified by the Quality Controller.
6 The issue of raw material for production is on the basis of production plan
which is based on demand & availability.
D PROCESS
Method of production followed by Company-
· Job Method
· Batch Method
· Flow/Process Method
· Uniform Method
E Finished Goods
Check that
1 The production Manager verifies the final product according to the standard
production plan and records the same with deviations, if any in respect of
quality and quantity both.
a Quantity Analysis is done by the Production Manager as set out in master chart
of the particular product.
b Quality Analysis is done by the Quality Controller for the finished goods. The
Master Card for the quality check is pasted at each such place where the
production process is carried on.
2 Samples taken for above purpose are recorded in the quality check register.
Verify the no. of samples taken per lot of production.
3 The finished goods inventory is maintained as per the Purchase and Inventory
Policy of the Company.
F Wastage
Check that
1 Proper classification of wastage is done into Normal & Abnormal.
2 Classification as abnormal is done if wastage is occurred due to the following:
· Error in machine
· Raw material quality issues
· Power cut with prior information
· Labour mistake
· All other wastage which is not normal
2 The wastage is properly recorded in the wastage register/sheet on daily basis
along with proper reasons and it is shown in the production MIS in the
prescribed format.
3 The monthly average wastage is properly calculated and if the wastage exceeds
the standard wastage than necessary steps to reduce the wastage are taken.
INTERNAL AUDIT CHECKLIST
V Sales Coordination
Particulars Checked By
B Price List
1
Complete & updated price list for each product is kept with Sales Coordinator
2 The revision of price list is authorized and verified by the Unit Head and
informed to the higher management.
3 Revision of the prices is, as per industry & market factors, and informed to the
Sales Coordinator and Dealers/Distributors by the Unit Head
C Invoicing
1 Check that invoice is as per latest price list
2 Also check that it is according to the provisions of Excise, VAT/CST etc.
3 Credit terms & interest thereon & maximum & minimum credit period
4 Discount schemes
5 Check for any changes in the invoicing software and its reporting to higher
management
D Dispatch
1 Check that goods are removed as per applicable Excise Rules.
2 Also check Sales coordinator's responsibility that-
• The goods are properly checked as per sales order received.
• The duties and taxes are properly paid / charged.
• The transportation cost is accounted
• Proper weight / measurement done.
• Gate pass / Outward note prepared.
E Verification of Finished Stock
1 Inventory of Finished Goods kept by Sales Coordinator
2 Physical Verification of Finished Goods on monthly basis by Manager
(Commercial) with proper recording of same in hard copy
3 Further, bifurcated as per the moveability and the value of the same .i.e. FSN,
ABC analysis.
4 Check for
• Proper utilization of the space.
• Proper coding
• Precautionary measures
• Arrangement on the basis of moveability.
G General
Verify age-wise analysis of debtors done by the Manager Commercial on
monthly basis
AUDIT CHECKLIST
Remarks
INTERNAL AUDIT CHECKLIST
VI Marketing Policy
A Marketing Process
Verify that the company is following prescribed marketing procedure
• Situation Analysis
• Market Strategy
• Market Mix Decision
• Implementation
B Situation Analysis
Check that following procedure is properly followed
1 Identifying customer needs & company's resources to fulfill those needs
C Marketing Strategy
Check that following procedure is properly followed
1 Product Life Cycle - stage
2 Pricing Decision
3 Market study of product - seasonal demand
4 Authorisation of extra discount
5 Prospective buyers- identified by proper coordination from dealers
6 Prospective marketing territory analysis- unit head
7 Verify the Costing method used by Unit Head
8 Sanction of discount by unit head
9 Product Promotion
i Verify the approval of budget by the higher management after it is set by
Finance Manager & Unit Head
ii Also verify various schemes given to traders & consumers, set by
marketing manager for its authorisation
iii Monthly sales appraisal shall be done by the Marketing Manager for all
the SRs working under him in MSA (Monthly Sales Appraisal Form)
A Reimbursement Grades-
1 For Cities
A - All metropolitan & Capital cities
B - Cities with population < Rs 3Lakhs
C - Cities with population > Rs 3Lakhs
2 For Employees
Special Grade - Unit Head & Higher Management
Grade I - Regional Manager/Marketing Manager
Grade I - Functional Manager/Marketing Executive
B Reimbursement of Expenses
1 Verify that reimbursement is as per Tour & Travel Policy, and claims are
submitted with Tour Progamme approved by the Immediate Boss/Unit Head
2 Other reimbursement are as per discretion of Unit Head with proper justification
B Payment
Check that
1 Payment is made before due date by Authorised person
2 Proper due date chart is maintained and displayed.
3 The Unit Head intimates the Asst Taxation Manager about the statutory
payments through mail/hard copy before 3 days of the due date.
4 Copy of challans is sent to Asst Taxation Manager by 10th of next month
5 Monthly consolidated report in prescribed format for all statutory payments is
forwarded to Asst Taxation Manager
6 All the financials are certified by Unit Head
E General
Check that
1 Any amendment in the applicable act is informed by the Asst Taxation
Manager to the Unit Head with the due date of applicability.
2 Unit Head follows the Notification / circular (Direct & Indirect tax) issued by
Govt. when informed by the Asst. taxation manager.
3 The following certified details are provided by Unit Head to ATM -
i Challan of tax payment
ii Ledger of the account.
iii Account statement of party / Purchase / sales etc.
iv Rate of TDS/ VAT/ CST/ Excise Duty / Service tax / PF / ESI
v Statement of VAT-7,VAT-8 & VAT-9
vi Details of statutory forms (VAT forms) used during the period.
vii Ledger of VAT / Excise / Service Tax
viii Return shall be Certified / verified by Unit head.
ix Return shall be authorized by taxation Dept.
x Return shall be filed on due date
INTERNAL AUDIT CHECKLIST
IX Finance
A Stock
Check that
1 Age wise analysis of FG is done on monthly basis by the stores keeper and
authorised by Manager Commercial
2 Physical verification is done monthly by unit staff
3 Proper classification of Non Moving Stock is done by unit
4 Above records are verified by Manager Commercial and reported to Unit Head,
which further reports it to Finance Officer
B Cash
Check
1 Physical cash in custody of Accounts assistant at least once a month, prefer
surprise checks
2 The minimum & maximum cash balance at any point of time is Rs.10,000 and
Rs. 1 Lac respectively
3 That physical cash is verified by person other than the person in who's custody
cash is kept, which is further approved by unit Head
4 Payments > 20000 are made through cheque
5 That Assistant finance manager's surprise physical verification of the cash,
done at-least twice a month
6 Cash Withdrawal Note for withdrawal of cash from bank which is authorised
by Unit Head
C Bank
Check that
1 Minimum bank balance at any time is Rs 5000
2 Balance above a specified limit is invested in FD by approval of AFM
3 Monthly BRS is prepared by Mang. Comm and is sent to AFM after Unit
Head's authorisation
4 The Cheque Details Register maintained by Ass. A/cs and vetted by Unit Head
5 The acknowledgement of the cheque received from the third party and the
cheque issued to the third party
6 Proper recording of Bank Charges on monthly basis and informing the same to
Unit Head and AFM
D Debtors
Check that
1 Age wise analysis on monthly basis is done by MC and the same is
reported to Unit Head who forward it to AFM
2 Credit period & interest thereon as per Sales & Finance Policy
3 Quartly balance confirmation & turnover ratio is done by MC & reported to
Unit Head
E Creditors
Check that
1 Payment is made through cheque only
2 Maximum credit period of 30 days or discount, as the case may be is availed
G Investments
Check that
1 Proper Investment Register for recording of investments and its verification by
UH is done
2 New investments are made only after proper approval by AFM
3 Proper investment note is prepared by the Finance Officer.
4 The original documents of the investments are secured by the Unit Head
A Vouching
Check for
1 Separate voucher for expenses, sales (invoices) and
purchases.
2
Separate vouchers for cash, bank and other transactions.
3 Signature of Maker, Checker & Authoriser as per slab
4 Proper documentation of each voucher
5 Proper verification each voucher before entry
B Sales
1 Following documents to be verified before invoicing-
i Previous Accounts status of Debtors
ii Status of finished goods
iii Sales Order Received
iv Goods Outward Note/ Gate Pass
v Sale Price as per the current price list
vi Discount as per scheme
vii Proper Duty / Tax Structure
2 Sales bill are to verified before dispatch by Excise personnel
C Purchase
1 Following documents to be verified before revenue
purchases-
i Price Quotations
ii Purchase Indents
iii Purchase Orders
iv Goods Inward Note/ Gate Pass
v Raw Material Inspection Report
vi Taxation/ Duty Structure
2 Authorisation as per slab
3 Following documents to be verified before capital purchases-
i Price Quotations
ii Purchase Indents
iii Purchase Orders
iv Goods Inward Note/ Gate Pass
v Taxation/ Duty Structure
D Payment To Employees
Following documents to be verified before payment
i Salary Slab (As per HR Policy)
ii Proper calculation of deductions /allowances/ perquisites.
iii Calculation of PF
iv Leave taken by employee (As per HR Policy)
v Loans and Advances given to employees
vi Signature of the preparer and verifying authority on the salary
sheet.(As per HR Policy)
F Other Payments
Verify for
1 Revenue Stamp for cash payment > Rs 5000
2 Payment > Rs 20000 through cheque
3 Payment to creditors
i Terms of payment
ii Mode of Payment
iii Authorisation