INTERNAL AUDIT OF FINANCE DIVISION 01.

BANK RECONCILIATIONS

a. b. c. d.

Review the monthly bank reconciliation statements and check whether the balances are agreed with the cash and bank statements. Check whether the bank reconciliation statements have been reviewed and approved by a responsible officer. Check the un-presented cheques and un-realized cheques and check whether any un-presented cheques are appearing for more than six months. Check whether any unknown debits and unknown credits balances are appearing in the bank reconciliation statements without clearing for more than one month and obtain the explanations from relevant Accountant. Check the arithmetical accuracy of the bank reconciliation statement.

e.

02.

JOURNAL VOUCHERS

a. Check whether the proper approval has been obtained for the journal entry. b. Check whether proper supporting documents attached to the journal voucher. c. Check whether the Audit Trail has been obtained each and every day for ensuring the accuracy. 03. CREDIT NOTES a. Check whether a proper procedure has been followed for issuing credit notes. b. Check whether the BOD approvals have been obtained before issuing credit notes. c. Check the purpose of issuing credit notes for identifying whether it is for SDAF or Sales Return. d. Check whether correct rate has been applied when issuing Credit Notes. e. Check whether Finance has thoroughly checked the credit notes for all the accuracy before those credit notes are accepted. f. Cross check the Invoice Rate per unit and Credit note rate per unit and identify any variances are available and obtain the explanations.

04. PRICING a. Check the Pricing file and check whether it is properly updated. b. Check whether ACCTOP Computer System is being updated with all the price changes for obtaining correct price at any given time. c. Check whether proper approvals from BOD have been obtained for each and every revise of prices. d. Check whether proper system controls have been established for avoiding price changes without approvals 05. RECOVERIES FROM EMPLOYEES a. Check the recovery receivable ledger account for pending recoveries not yet recovered.(Eg: Mobile Over limits, Sales shortages, late attendance etc.) b. Check the recoveries from employees have been updated properly. c. Obtain the list of pending recoveries for long outstanding and obtain the explanations from finance not recovering. 06. RESERVE COMMISSION PAYABLE a. Check whether set procedure has been followed for reserve commissions. b. Check whether correct accounting entries have been passed and updated to the system without any delay. 07. DEBIT NOTES a. Check whether proper approvals have been obtained for raising debit notes. b. Check whether all the supporting documents have been attached for debit notes. c. Check whether correct accounting entries have been passed and relevant accounts have been updated without delay.

08. INSURANCE CLAIMS

a. Check whether Insurance Claims Registers has been properly updated with all the relevant information. b. Check whether all the claims have been made once the accident took place without any delay. c. Check whether all the approved claims have been received within the stipulated time. d. Check whether prompt follow-up actions have been taken for delayed payments. e. Check whether insurance files are properly maintained and updated with due care. f. Check whether there are significant time gap between Claim Made Date and Repair Completed Date. g. Check whether relevant ledger accounts have been properly updated by the Finance Division. h. Prepare a Monthly Reconciliation which includes Claims made during the month, claims received during the month and pending claims receivables. 09. DEPOSITS AND ADVANCES a. Check whether Deposits and Advance ledger accounts are properly updated with due care. b. Analyze the Deposits and Advance accounts for obtaining correct picture for which purpose the deposits being kept. c. Check whether container deposits have been properly withdrawn. d. Check whether all the other deposits have been claimed once the purpose is completed. 10. BANK ADVICES FOR IMPORTS a. Check whether charges have been applied as per the agreement. b. Check whether the approvals have been obtained from BOD. c. Check whether the correct rate has been applied when making the payment.

11. COSTING a. Ensure GP is managed within the standard limit b. Ensure Shipment wise Pre / Post Costing is done for each shipment. c. Ensure the Shipment wise GP margin complies with the Company Standard Avg d. Ensure regular update of Cost Price with GP details e. Check with regard to Discount & Pricing as per the Company Policy f. Carrey out the analytical review of product costing. 12. FILING OF VAT RETURNS a. Check whether all VAT returns have been filed properly and submitted to the department within the stipulated time period. b. Check whether Input VAT and Output VAT have been computed correctly. c. Check whether any fines or penalties have been paid and the reasons for paying penalties with proper explanations. d. Check the relevant ledger accounts. 13. CONTROL ACCOUNTS a. Check the purpose of each and every control accounts. b. Check whether control accounts have been properly reconciled. c. Check whether balances of the control accounts are Zero, if not obtain the explanations and reconciliations. 14. DEBTORS CONTROL a. Check whether Debtors are being followed up / Are they within the Credit limit / What action taken on doubtful debts / Legal cases are being followed up / outcome of the cases / Bad Debts collection status b. Check whether proper Credit policies in place & Debtors are managed accordingly c. Debtors Control Accounts are properly maintained & updated and all the Invoices are included

d. Return cheques outstanding should be collected within 15 days e. PD Cheques are properly recorded & banked on time f. Understand the Credit Control Policy & Procedure to prevent any loop holes 15. CREDITORS MANAGEMENT a. Check whether Local and Imports creditors are settled on time b. Monitor Credit Control Policies of the Company c. Check whether Credit Purchases are in accordance with the Company Policy d. Check whether Creditors Control Accounts are properly maintained & updated e. Check whether Control account Balance has been reconciled properly.

16. STOCK CONTROL a. Study the current & future position of Stocks and see whether proper ROL and ROQ is maintained b. Identify slow and non moving Stocks and obtain the explanations and the remedial actions C. Check the system controls for stocks and identify if there is any loop holes and inform to the management for remedial actions. d. Check whether Stocks are properly managed. e. Check whether stock control system is updated properly.