INTERNAL AUDIT

REPORT
ABC Manufacturing Company

Jl. Hutan Terlarang No. 8

(0351) 777333
Fax: 0683-9283-283
www.ABC.com
ABC.Manufacturing@gmail.com
Formal Audit Report Introductory Page
Internal Audit Department Audit Report
Division Production

To Serena Lope, Director of Operations

CC : Stephen Eleven, Manager of Production Facility

The ABC Manufacturing Company Internal Audit Department has performed an

internal control review of the Peerless Division Production. The Objective of our review was
to assess the quality of the internal control environment and the control procedures
operating the facility unit. Our work was restricted to operational facility and safety and did
not include production activities. We completed the fieldwork for this audit on 2020.
Our review included an assessment of the adequacy of metal drill processes
equipment in place and the operators compliance with overall ABC Manufacturing Company
procedures and safety policies. We performed detailed test of procedures and safety policies,
as we felt appropriate, and also reviewed controls equipment condition. In addition, we
performed a detailed confirmation about the safety facility.
We generally found the internal controls over the division production to be not
adequacy to control safety in production facility unit. We did find some areas where we
recommend that corrective actions are necessary to improve the internal control structures.
Our internal audit findings and recommendation and Management’s planned corrective
actions are included in this report.

Momo Swift
Internal Audit, Nov 27, 2020
Audit Report Findings and Recommendation
I. Worker Health Check
ABC Manufacturing Company already has a policy regarding safety but this does not
yet include a policy regarding routine employee health checks. we found that five
downtime injuries drill operators occurred in six months. in addition, two operators
experienced detectable hearing loss during six month period.

Recommendation. The company must make the policies about worker health. And
also check the worker health regularly once a month to three months. The ABC
Manufacturing Company should review and evaluate the procedures safety in the
division.

II. Maintenance of Equipment Facility

ABC Manufacturing Company already has a policy about maintenance of equipment
facility which is one of the safety of workers in the production process. However, we
found that the equipment in relatively poor condition with little evidence of any
regular maintenance. And also the drills are dull and broken. In Addition, drill bits were
not kept in supply for replacement. It can make the operators get accident when they
work.

Recommendation. The company should strengthened the policy to check the

equipment facility. And also remind the operators to clean and return the equipment
facility to its place. In addition, the ABC Manufacturing Company should provide the
procedure to deliver if there is damaged equipment.

III. Compliance of Safety Procedures

ABC Manufacturing Company already has safety policies that operators are required
to wear safety gloves, ear protector, and other self protection equipment. And also,
the drill presses are required to have a clear, plastic safety shield to safely feed the
metal through the press. However, we found that 5 of 10 operators were using ear
protector during auditor visit, 6 were wearing gloves, 4 wearing safety glasses. The
incompliance of safety procedures can endanger the operators safety.

Recommendation. The company should strengthened and remind to follow the policy
of safety procedures. And Also check the worker safety regularly. So the accidents can
be prevented.