Internal Audit

check whether proper GRN's and Issues slips are maintained.

purchase orders in detail

You can go through the Institutes Guidelines on Internal Audit

Hi Pavithra,

please find the following as a useful tips for your internal audit.

1) First go through the internal audit mannual provided to you by the client / your firm.

2) spend an hour and Sit with the client and understand the what are the inputs, its nature, how they are stored, ordering cycle and shelf life.

3) now the points while validating the inventories:

a) For all the purchases of input materials obtain the quotation, purchase order (contract/agreement) and invoice, followed by the Delivery challan, GRN, quality certificates both internal(if any) and external, understand the allowability of the loss of goods (vapourisation etc for some chemicals). Dont forget to check for the approval limits for all the above as per the deligation of authority. Obtain the approval limits and organisational chart.

b) Inspect on a sample basis the weekly, daily physical stock certificate coupled with the lab reports and calibration charts if any. and recalculate the stocks if necessary.

c) understand the inventory valuation model as per the company's policy which should be in compliance with the relevant accounting standard issued by ICAI.

For any further queries contact me.