INTERNAL CONTROLS

of
IWS LOGISTICS PVT LTD.
IWS LOGISTIC COMPANY
IWS Logistics is an industry leader in a host of multifaceted logistics solutions
such as transportation, container handling, repair, washing and warehousing,
and in collaboration with largest shipping lines.
SWOT ANALYSIS
Strengths
1. Extensive Network: A well-established network of routes, hubs, and
warehouses.
2. Advanced Technology: Utilization of advanced logistics management
software for real-time tracking and efficient inventory management.
3. Strong Brand Reputation: A solid reputation for reliability and timely
delivery.
4. Diverse Services: Offering a range of services such as freight
forwarding, warehousing, and last-mile delivery.
SWOT ANALYSIS
Weaknesses
1. High Operational Costs: Significant expenses related to fuel,
maintenance, and labor.
2. Dependence on External Factors: Vulnerability to external factors such
as fuel price fluctuations and traffic conditions.
3. Complex Regulatory Compliance: Challenges in navigating varying
regulations across different regions and countries.
SWOT ANALYSIS
Opportunities

1. E-commerce Growth: Expanding e-commerce market requiring robust

logistics support.
2. Sustainability Trends: Increasing demand for green logistics and eco-
friendly transportation solutions.
3. Global Trade Expansion: Growth in international trade creating
opportunities for cross-border logistics.
SWOT ANALYSIS
Threats

1. Intense Competition: High level of competition from both established

players and new entrants.
2. Regulatory Changes: Potential for new regulations that could increase
costs or limit operational flexibility.
3. Cybersecurity Risks: Threats related to data breaches and cyber-attacks
impacting logistics operations.
4. Natural Disasters: Vulnerability to disruptions caused by natural events
such as floods, hurricanes, and earthquakes.
01
Section
header
Two ideas
MERCURY
Mercury is the closest planet to the Sun
and the smallest one in the Solar System
—it’s only a bit larger than the Moon.
The planet’s name has nothing to do
with the liquid metal
VENUS
Venus has a beautiful name and is the
second planet from the Sun. It’s terribly
hot—even hotter than Mercury—and its
atmosphere is extremely poisonous
Three ideas

JUPITER VENUS SATURN

Jupiter is a gas giant and Venus has a beautiful name Saturn is a gas giant and
the biggest planet in the and is the second planet has several rings. This
Solar System. It's the from the Sun. It’s terribly planet is composed mostly
fourth-brightest object in hot and its atmosphere is of hydrogen and helium
the night sky and it was poisonous. It’s the second- and it was named after the
named after the Roman god brightest object famous Roman god of
of the skies wealth
“This is a quote, words full of wisdom that someone
important said and can make the reader get
inspired.”

—SOMEONE FAMOUS
9h 55m 23s
Jupiter's rotation period

333,000
The Sun’s mass compared to Earth’s

386,000 km
Distance between Earth and the Moon
 01.Internal control issues. (Quality issues)

i) Petty cash management

As indicated by Mr. Senanayake (Chairman), there are three forklifts (in working condition) to run the daily operations.
As these too are old, the necessary repairs are essential to run the operations smoothly without any disturbance to the
operations. Hence as he suggested, funds are required sufficiently to meet the major repairs as and when necessary, not only
for the forklifts but for the repairs of other assets in use as well.
Hence, it was suggested that a special savings account be opened only for the Logistic operations with a float of Rs.250,000,
to withdraw the funds required as and when necessary. The authority and necessary guidelines in the operations of the
account should be given to responsible staff.
The requirement of entering the petty cash transactions on real time in the ERP system (including the attaching of
supporting supplier bills) was discussed. This would be a good practice to get the updated ledgers pertaining to the
petty cash when the cash is issued for the necessary payments. The above process could be reconciled every
Friday and could come under the supervision of the Finance Manager and or the internal auditor.
The basis of the reliability on the payments to be done through the online transfers or withdrawals by the relevant
authorized officer will solely depend on the decision taken by the management and or Mr. Senanayake as he
oversees selecting of the suppliers, reliable for the operations. Once the weekly payment reconciliation is
completed and supervised, the weekly report should be shared with the Head office.
 ii)ERP System

We would require a clear chart of the protocols of the ERP System, the names of maximum users, handling
and creating user passwords, authority levels of the payment approvals, creating receipts and payments etc.
and the security actions available in the event of any system corruption or data loss or any un authorized
access.
 Recommendations
1.Develop a clear and concise chart outlining protocols for the ERP system, including user management, password
handling, and authorization levels.
2.Specify maximum user limits and procedures for creating and managing user passwords to ensure security.
3.Define authority levels for payment approvals within the ERP system to maintain control and accountability.
4.Outline procedures for creating receipts and processing payments within the ERP system to ensure accuracy and
compliance.
5.Implement robust security measures to safeguard against system corruption, data loss, and unauthorized access.
6.Establish protocols for detecting and responding to security breaches, including immediate actions to mitigate risks
and restore system integrity.
7.Provide training and awareness programs for employees to ensure understanding and adherence to ERP system
protocols and security measures.
8.Conduct regular audits and reviews of ERP system protocols and security measures to identify and address any
vulnerabilities or areas for improvement.
 iii) Fixed assets directly connected with ongoing operations.

As indicated by Mr. Senanayake, the preventive maintenance policies of the assets, has to be discussed with
the Chairman and the Board of Directors since the assets used on a 24-hour service (Fork lifts, prime movers,
trailers). Any repair of these resources will lead to unexpected delays and in damaging the reputation leading
to client loss due to the competitive nature of the services offered.
Recommendations
1.Schedule a meeting with the Chairman and the Board of Directors to discuss preventive maintenance
policies for critical assets.

2.Emphasize the importance of timely maintenance to avoid unexpected delays and uphold the company's
reputation.

3.Highlight the impact of asset downtime on client satisfaction and retention in a competitive market.

4.Propose strategies for proactive maintenance scheduling to minimize disruptions to operations.

5.Seek approval for necessary investments in maintenance infrastructure and resources to support
uninterrupted service delivery.

6.Develop a comprehensive preventive maintenance plan in collaboration with relevant stakeholders.

7.Implement a monitoring mechanism to track the effectiveness of preventive maintenance efforts and
make adjustments as needed.
iv)Payroll issues

As for the payment of salaries and wages, it is noted that a proper review should be made on the
HR policies by the Board of Directors. The HR policy of the company should be in line with
the compliance requirement as per the Income Tax regulations and the Labour laws.
The Internal Auditor pointed out that there is a practice to maintain minimum take home pay of
Rs.45,000 by each employee who earns less than Rs.45,000. The difference from the actual salary
to 45,000 salary limit was paid as an extra allowance. She indicated that there is no approval granted
to verify this rule.
The points discussed above are critical and would need management views as a reply to this letter and
we advise that internal controls be designed, also based on the above areas.
Recommendations

1.Review and update HR policies to ensure compliance with Income Tax regulations and Labour laws.
2.Obtain approval for the practice of maintaining a minimum take-home pay of Rs.45,000 for employees
earning less than Rs.45,000.
3.Establish internal controls to verify and monitor adherence to the salary policy.
4.Ensure transparency and accountability in salary disbursement practices.
5.Conduct regular audits to assess compliance with HR policies and regulations.
6.Implement corrective actions as necessary to address any discrepancies or non-compliance issues
identified.
 Thanks!
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