Audit Programme Format for Internal Audit

Sample / Template / Example of a Manufacturing Company Audit Programme for Internal Audit / External Audit / Statuary Audit form Depot / Marketing & Sales Department in India in Word/.doc/.Pdf

PART – “I”


Time Limit / Frequency: - The approximate time which the team of an External System / Internal Auditor (appointed by HO) is expected to spend on a depot is minimum 03 days per visit. The audit may be conducted twice a year or at least once in a year, preferably in 1st and IVth Quarter of the year. 

Objective:- A complete analysis of the working of the depot, preparation of the system, working out the lacuna in the present working and suggestions to overcome the same, comments of the direct financial losses incurred by the depot during the year, comments on the complete physical stocks maintained by the depot and its comparison with the book stock (Color Code-wise), analysis of the outstanding, comment on the overdue status, co-ordination of the depot with the accounting / stock entries made at HO level and their approval, to check whether the depot is fulfilling the Statutory requirements, and to comment on the other procedures to be followed by the depot as per the Marketing Guidelines.

Specimen Audit Programme:-

i) Physical verification of Stocks:

a) To comment on the pattern of taking physical verification of the stocks by the Regional Accountant / Internal Auditor under the payroll of the Company, and suggest improvements if any.

b) To take physical verification of the stock, lying in various godowns of the depot and report short / excess and undelivered goods if any with reason thereof, if the physical verification done by the depot personnel / RA was not found satisfactory.

c) To check and take comments of the depot on lowest moving / non-moving items.

d) To check and take the details of the damaged goods lying in the godown, take comments on the cause of the damages and the saleable position of these goods.

e) To check and take comment on whether any scrap or waste material are lying in godown, the reason behind the same and comment on their consumption / transfer to other depots.

f) To check whether FIFO method is applied during incoming and outward movement of stocks.

g) To prepare a report on the sale / transfer of less saleable / slow moving items in consultation with the depot in-charge, and give necessary suggestions either to sale these items or to transfer the same to some depots having the demand of these items, so that the items can be prevented of becoming obsolete.

h) To check that no transfer of stock shall be made to other depots without prior approval (as decided by the Guidelines).

i) To check the stock made at HO regarding the depot, and comment as to whether all the internal control measure are taken care off while passing such entries. The comment should be given as to whether the entries passed are duly approved, and simultaneous affect is taken in the books / stocks maintained at the depot.

ii) Inward Movement of the Stocks:-

The inward movement of the goods from factory to depot is to be checked thoroughly. A comment should be given as to the stocks were entered in the books Color Code -wise strictly as per the challan accompanied with the respective vehicle with which the goods were received.

iii) Dealers and their Appointment:-

a. To comment on each dealer’s working with the depot based on his past performance. This may include his credibility, pattern of making payments against the sale, overdue status, frequency of cheques dishonor, etc.

b. To work out whether the papers regarding the appointment of the dealers are complete in all respect.

iv) Billing & Delivery :-

a. To test check whether the invoices are signed by the authorized personnel. Also, the invoices are made on the company’s printed invoices.

b. To check that the goods are delivered to the dealers and no goods are pending for delivery.

v) Ugai:

a. Items more than allowable period with ageing analysis as on the date of the audit.

b. To check whether there is any case, where suit has been filed for recovery, status thereof i.e., continuing since when and the circumstances involved and comment on the possibility of recovery in his opinion with the consultation of the depot in-charge.

c. To comment on the un-operative amounts lying in credit at the account of the dealer.

d. To check that accounts are being reconciled periodically and the confirmation of account statement are obtained in writing from all the dealers on quarterly basis.

e. To check the Money Receipt, PIF, Pay-In-Slips with Bank Book.

f. To check the Bank Reconciliation Statement and report on the un-cleared cheques.

vi) Safety Measures for Stocks:-

a. To comment whether there is a sufficient and suitable environment for preservation of the stock.

b. To find out whether the stocks are safeguarded against theft or misuse by any person at any time.

c. To find out whether the stocks are safeguarded against fire, flood, natural calamities, termite attacks, etc.

d. Stock must be kept in the premises, which should be free from water leakages.

e. Fire fighting equipments must be installed in stock premises and these should be regularly checked.

vii) Insurance of stock:

a. Check whether the insurance policies covers the below mentioned risks:

i) Fire

ii) Natural Calamities.

b. It should be ensured that the sum insured is sufficient to cover the amount of the stocks at any point of time.

viii) Checking of the Credit / Debit Notes:-

To check the credit / debit notes prepared by the depot in favor of the dealer and to comment whether the same are fully supported and issued correctly.

ix) Statutory Dues:-

a) To check that the applicable taxes are deposited in time.

b) To check that the tax returns are filed on due dates.

c) To check that the tax assessments are completed and details of pending assessments.

x) Comment on the Previous Audit Report and Suggestions:-

a) To comment on the status of the observations found in the last/previous audit report(s) of RA/Internal Auditor.

b) To comment on the status of the observations found in the previous audit report of the External Auditor.

xi) Management Information System:-

To check and comment that the information to be given to the Management as per the guidelines are in consonance with the actual and the same are sent in the required formats.

xii) Strategy for Growth:-

A discussion is to be conducted with the Depot-in-charge / Management of the depot regarding the problems they are facing in their areas and the strategy for growth of sales is to be devised incorporating the views of the persons involved.

xiii) Compliance of the Previous Audit Reports:-

To check whether the compliance of the Regional Auditor’s Report / Internal Auditor’s Report and the External Auditor’s Report has been made by the Depot Management and confirm the same.

xiv) Authentication:-

The findings of External Auditor must be incorporated on a Draft Audit Report which is required to be signed by himself and the depot-in-charge, with one copy to be kept by him, one to be sent to HO and one another to be kept at the depot.

The above format is also available here for download in Word Format


Post a Comment