A list of

Processes in the OrganizationInternal Controls effectively redefined

A list of various processes in the organization where internal controls can be defined in such a way which ensure the orderly and efficient conduct of its business, including adherence to organization's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the records, and the timely preparation of reliable information.

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About CoreIAIn addition to monitoring for various compliance of laws and book keeping, management of entity expects establishment of enhanced internal controls, systematic monitoring of plan v/s. performance of organization’s activities, measures to improve the efficiency of existing flow of financial information, monitoring for implementation of these measures, to bring value to the organization, risk based approach and global practice without diluting existing & traditional fundamentals.

Our multi-disciplinary team constantly engaged to develop best business practices, knowledge database and the ability to leverage on the professional expertise by technical experience and financial acumen.

This program provides information to ‘management’ on various internal controls and guidance to “implementing internal auditors”. By using information received from this program, management and internal auditors can get object-wise practical understanding.

Information on this presentation and on www.coreia.in will provide an opportunity to learn more about some of the major issues that are shaping the world today to provide reasonable assurance that financial information is reliable, there is compliance with applicable laws and regulations and the organization’s operations are effectively controlled.

Wish you “internal controls effectively redefined”.

Thanks.

CoreIA Team

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Top 20 areas / processes in the organisation where internal controls can be strengthened:

1. Human resources / contract labour / men power supply agency2. Inventory / warehouse operations3. Security gate operations4. Procurement and vendor management5. Production operations (includes yield, waste / scrap)6. In-house production / outside job work / third party operations7. Quality check operations8. Logistics / supply chain / distribution / branch / CFA operations9. Product Sales operations and customer management10. Services Sales operations and customer management11. Advertisement and sales promotion activities12. Accounts, accounting standards, budgets and cost management13. Safety measures, insurance coverage and claims tracking14. Direct and indirect taxes15. Corporate law & legal compliances 16. Commercial and other laws17. Fixed asset / capex18. Finance and treasury management19. ERP / SAP / portals / customised software / e-system20. Management information system / strategic management committee

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HUMAN RESOURCES / CONTRACT LABOUR / MEN POWER SUPPLY AGENCY:

Verification of joining to leaving procedure, documentation, accounting entries of on roll and off roll human resources. Further, it includes verification of attendance recording and processing, complaint resolving system, compliance of labour laws, adherence of company policy, employee loans advances & assets, travel & conveyance, controls in ERP/SAP etc.

INVENTORY / WAREHOUSE OPERATIONS:

Verification of material categorisation & classification, inventory records, inventory levels, stacking norms, gate entry v/s. GRN v/s. invoice, inventory ageing, BOM, wastage, inter department transfer, overdue RGP, cross check of NRGP, location wise inventory, perpetual physical verification of stock, safe keeping of warehouse records, adherence of company policy, controls in ERP/SAP etc.

SECURITY GATE OPERATIONS:

Verification of material movement at security gate, security gate timing policy, personnel in-out recording at security gate, safe keeping of records, controls in ERP/SAP etc.Process-wise brief scope of

internal control verification

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PROCUREMENT AND VENDOR MANAGEMENT:

Verification of purchase requisition to payment in defined timeline & documentation, recording of rejection & intimation, approval procedure for deviation, MSMED vendors, new vendor development, vendor blocking, confirmation and balances reconciliation, GRN without of PR / PO, purchases from unregistered dealer, adequate tolerance, bill to bill payment tracking, tax code, unplanned delivery cost, adherence of company policy, controls in ERP/SAP etc.

PRODUCTION OPERATIONS (INCLUDES YIELD, WASTE / SCRAP):

Verification of BOM approval, production planning, production order, yield / waste / scrap norms, stock at production floor, shop floor rejection, recording of scrap / waste generation, batch manufacturing report, planned production v/s. actual production, overtime usage, preventive maintenance plan, adherence of company policy, controls in ERP/SAP etc.

IN-HOUSE PRODUCTION / OUTSIDE JOB WORK / THIRD PARTY OPERATIONS:

Verification of agreement / contract, men power deployment & in-out records of job processor, defining material for in-house or outside job, record keeping of material sent for outside job, stock lying at third party location, job processor quality checking, delay / pending receipt of material sent for outside job, cost benefit analysis, adherence of company policy, controls in ERP/SAP etc.

Process-wise brief scope of internal control verification

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QUALITY CHECK OPERATIONS:

Verification of selection of QC sample, QC criteria, deviation & approvals, QC sample retention & disposal, authorisation & documentation of quality reports, delayed / pending clearance from QA department, QC release strategy in system / manual, adherence of company policy, controls in ERP/SAP etc.

LOGISTICS / SUPPLY CHAIN / DISTRIBUTION / BRANCH / CFA OPERATIONS:

Verification of logistics policy, Mechanism to monitor delay in transportation, carrier selection / evaluation procedure, premium freight / regular freight / discounted freight, controls in ERP/SAP etc.

PRODUCT SALES OPERATIONS AND CUSTOMER MANAGEMENT:

Verification of inquiry to order finalisation, order to collection monitoring with timeline, credit policy, discount / trade scheme configuration, confirmation and balances reconciliation procedure, export incentive accounting and claims, statutory forms, adherence of company policy, controls in ERP/SAP etc.

Process-wise brief scope of internal control verification

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SERVICES SALES OPERATIONS AND CUSTOMER MANAGEMENT:

Verification of records of customers covered under AMC / warranty / call basis, service report preparation and submission, accuracy of information filing in the service report, authorisation for service on free / lower rate, engineer / employee wise service execution monitoring, monitoring over schedule of service under AMC, advance received vs. service provided, review over cancellation of AMC / call basis service, direct expense recovery, complain register and its closure, repeat complains and training procedure, adherence of company policy, provision of service or warranty expenses, controls in ERP/SAP etc.

ADVERTISEMENT AND SALES PROMOTION ACTIVITIES:Verification of plan of advertisement and budget, selection of advertisement type considering target time / users / product / location, segregation of budget over different activities, rate negotiation / advertisement period and other terms like (GRP / CPRP / Timing), Monitoring over unexecuted spots or change in spots committed, positioning of advertisement in the slot of program, usage of promotional items in the different languages considering location / user, promotional materials for the scheme / product launch / specific day, closure procedure for completion of scheme / product launch / specific day / display, processing of advertisement bills with deviations, evaluation mechanism for placing of hoarding, adherence of company policy, controls in ERP/SAP etc.

DIRECT AND INDIRECT TAXES:

Verification of compliance under Income Tax, Corporation Tax, Local Body Taxes (LBT), Sales Tax, Service Tax, Excise Duty, State Excise, Customs duties, controls in ERP/SAP etc.

Process-wise brief scope of internal control verification

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ACCOUNTS, ACCOUNTING STANDARDS, BUDGETS AND COST MANAGEMENT:

Verification of book keeping, authorisation matrix, document management, detailed expense booking procedure, balance reconciliation and verification, account creation / grouping / chart of account, trackers of EMD / deposits / loan and advances / investments, capital expenses / revenue expenses, cut-off date transactions, budget vs. actual expense, inventory valuation as per costing, adherence of company policy, controls in ERP/SAP etc.

CORPORATE LAW & LEGAL COMPLIANCES:

Verification of deeds / documentation / registers / records as per act, compliance related to directors, loans / advance / RPT, Deposits, RC49, compliance with different sections / rules, submission of required forms / returns / information to ROC, internal financial controls, schedule VI, depreciation requirement, disclosure to be made in financial statements etc.

SAFETY MEASURES, INSURANCE COVERAGE AND CLAIMS TRACKING:

Verification of HACCP methodology and documentation, GMP policy, prerequisite HACCP programs, adequacy of insurance (assets, inventory, employee, WC, transport, medical etc.), claims tracker, adherence of company policy, controls in ERP/SAP etc.

Process-wise brief scope of internal control verification

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COMMERCIAL AND OTHER LAWS:

Verification of compliance of the Factories Act, 1948, The Apprentices Act, 1961, Minimum Wages Act, 1948, Contract Labour (R&A) Act, 1970, Payment of Gratuity Act, 1972, Payment of Bonus Act, 1965, Payment of Wages Act, 1936, adherence of company policy, controls in ERP/SAP etc.

FIXED ASSET / CAPEX:

Verification of assets budgeting and approval procedure, addition / disposal / impairment / depreciation, component accounting, identification coding procedure, fixed assets register, recording of shifting of location / division, divisional accounting, physical verification, adherence of company fixed assets policy, compliance with AS & IND AS, controls and recording in ERP/SAP etc.

FINANCE AND TREASURY MANAGEMENT:

Verification of existing capital budgeting to its execution / terms / deeds / documentation / servicing / CBA, available excess funds and its investment to achieve objective with optimum returns, adherence of company borrowing & investment policy, controls and calculations in ERP/SAP etc.Process-wise brief scope of

internal control verification

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ERP / SAP / PORTALS / CUSTOMISED SOFTWARE / E-SYSTEM:

Verification of user access controls / application controls, usage of controls through ERP-SAP, controls over various web based input-output portals, controls and linkages of customised software with ERP-SAP, backups, security controls of IT infrastructures, maximum usage of available E-system etc.

MANAGEMENT INFORMATION SYSTEM (MIS) / STRATEGIC MANAGEMENT COMMITTEE (SMC):

Verification of existing structure and extent of MIS-SMC, area-wise coverage and efforts of improvement, controls on adequacy of presentation by departmental heads, controls on implementation of out comes form MIS-SMC, minutes of meeting / action taken reports / pending compliance / agenda, adherence of company policy, controls & MIS through ERP/SAP etc.

Process-wise brief scope of internal control verification

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What we expect from you?

• Share this information with your internal audit team and conduct the presentation to shape up a broader view of internal controls area in your organization.

• Stay connected with us for coming process-wise detailed presentations to have insight on practical aspects of process-wise Internal Controls.

• Share your views / give your contribution of knowledge to us to help this research and development program.

• Share email address of the person to whom you want to include in this program.

• Let’s spread global best practices of effective internal controls across the economy.

Thanks