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Client Name Date Completed:
Audit Questionnaire: Research and Development (R&D)
Completed By:
Business Function: Manufacturing
Reviewed By:
Objective:
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
1.1
Management has defined and authorized strategic business
objectives, and processes are in place to ensure that all product
developments and research activities comply with these targets.
1.2
Management has established, authorized and implemented
documented procedures for the development and evolution of all
product ranges.
1.3
Established processes govern the direction of research activities
in order to ensure that attention is focused upon those projects
with the greatest potential benefit and implications for the
organization.
1.4
Established mechanisms prevent the investigation or
development of a product outside the defined and authorized
strategic parameters of the business.
Complete this checklist and apply audit procedures prescribed in relevant audit program for the question client answered "YES", evaluate the internal
controls and report the observations along with recommendations (if any.), for the Questions answered "NO" report as ineffective based on relevance of the
internal control activity and regulations (e.g. SOX), etc.
1) The R&D program is structured to exploit those areas with the greatest potential for the organization.
2) R&D program objectives are valid and clearly defined.
6) Market launch of new or modified products is adequately planned, executed and monitored.
5) R&D research projects are evaluated adequately.
3) R&D research projects resources are accounted accurately and product specification processes are adequate.
4) R&D research projects are comprehensive and create a positive image of the company.
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
1.5
Management has defined and authorized product development
plans with the intention of extending and prolonging the life of
existing products and introducing viable new lines.
1.6
Management review the product plans periodically to remain
relevant, up-to-date and in step with customer needs and market
developments.
1.7
The organization takes appropriate advantage of available
government and research grants (and what measures ensure that
eligibility for such schemes is maintained).
2.1
Management has established processes to ensure that their
product plans remain adequate, appropriate, viable, etc.
2.2
A Research & Development strategy and plan is developed,
documented and authorized, and steps are taken to effectively
monitor progress and achievements.
2.3
Processes are in place to maintain an accurate and up-to-date
awareness of all those current technologies, innovations, etc. with
a potential impact for the organization.
2.4
Beyond the specific product development projects, the
organization is sufficiently active in general and sector related
speculative research in order to ensure that a technological
advantage is maintained over competitors and industry entrants.
2.5
Competitor analysis and critical marketing timing considerations
are identified and planned for in the research program.
2.6
Measures are in place to ensure that crucial costs and selling
price targets are identified and monitored for achievement
throughout the project.
3.1
Management reviews that all product development projects are
valid, justified and authorized.
3.2
Management justifies the use of R&D resources in the planned
activities.
3.3
Established processes ensure that all the resources required to
undertake the development are accurately identified, costed,
justified and authorized.
3.4
Established measures prevent unauthorized research and
development costs.
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
3.1
Management has established procedures to ensure that the
design assessment, feasibility, and specification processes are
adequate and satisfactorily address quality, performance, and
regulatory standards.
3.2
Management takes steps to retain the skills and knowledge of key
specialist staff, and prevent others benefiting from the individual's
expertise.
3.3
Management ensures that research projects, product details,
development plans and business development strategies remain
confidential.
3.4
All appropriate technologies, processes and techniques
developed by the organization are adequately protected (at the
most appropriate time) from exploitation by others.
3.5
Key staff involved in product development are subject to either
fidelity bonding or commercial confidentiality clauses in their
employment contracts.
3.6
If relevant expertise or specialist knowledge exists outside the
organization, management ensures that the engagement of such
external specialists is justified, authorized, accurately costed, and
that progress is monitored.
3.7
Management has established procedures to ensure that external
consultants will not exploit or pass on details of the research they
are conducting on the organization's behalf.
3.8
Measures are taken to adequately protect research activities,
intellectual property, specifications, and all research plans and
data from either exploitation by others or unauthorized exposure.
3.9
Management evaluates that research activities do not violate
existing patents and copyrights.
3.1
Management reviews products that are subject to testing under
recognized trade, national or international quality/standards
schemes.
3.11
Measures are in place to ensure that new or modified products
are subject to extensive, adequate and appropriate testing
(including any sector specific, legally required, or specialist
product testing requirements).
4.1
Measures are in place to evaluate that clear (and authorized)
objectives and targets are established for each project (and their
achievement monitored and confirmed).
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
4.2
All product developments are subject to adequate project
management in order to cater for the following aspects:
- adequate coordination of all affected functions to ensure
achievement of development objectives;
- definition of key stages of the project and the ongoing
monitoring of actual progress against target;
- authorization and control of all project resources and costs.
4.3
Measures are in place to evaluate that crucial costs and selling
price targets are identified and monitored for achievement
throughout the project.
4.4
Management reviews that all R&D costs are identified, accounted
for, and reflected in the corporate accounts.
4.5
Established mechanisms are in place to for the correct
accounting treatment of R&D costs and the recovery of related
taxation benefits whenever applicable.
4.6
Adequate arrangements are made to provide management with
regular, accurate and relevant project information (i.e. progress,
costs versus budgets, failures to achieve deadlines, technical
problems, etc.).
4.7
Management has established processes to ensure that problems,
shortcomings, cost overruns, etc. are be promptly detected and
reported.
5.1
Established procedures are in place to review product
specifications prior to commercial launch which (when applicable)
are subject to the appropriate licensing by government or trade
regulators.
5.2
Upon launch of the product, management evaluates that
adequate plans are in place to address such matters as:
- adequacy of stocks;
- provision of staff training;
- launch timing to maximize the market impact;
- coordination of all affected functions, etc.
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
To the best of my knowledge, the answers
and comments noted above are accurate and
reflect the current internal controls within
this department:
Name and Title of Person Completing Form (please print)
Signature of Person Completing Form
10/3/2014
Date Form Completed
Name and Title of Department Director (please print)
Signature of Department Director
Date of Department Director's Signature