AUDIT PROGRAM

SI.
Business Area Internal Control Objective Audit Program for Test of Control
No.
Check that all purchases orders raised are against
approved Indent For Procurement
All purchases are authorised Check that approval as per Chart of Authority is
and valid. taken before formally issuing a PO to the vendor.
Check that regular reconciliation of open purchase
order and actual receipt is done
Check that more than one quotation are taken from
vendors and the same are techno-commercially
All PO raised are in the interest evaluated.
of the company. Check that where more than one quotation is not
available, note for reason for single quotation has
been provided and approved.
Vendor performance is as per Check that vendor evaluation is done at a regular
expectation of the company. interval.
Check vendor liability is booked only when PO, GRN
and Vendor invoice are received.

Amount posted to Accounts Map procedures for vendor returns. Ensure that
Purchase & Payable & Purchase account returns are communicated to the purchasing
1
Procurement account represents goods department and debit memo’s are prepared and
actually received. forwarded to accounts payable in a timely manner.

Check that all adjustments related to Accounts

Payable are approved.
Check that statements and invoices from suppliers
are reconciled in the vendors account regularly and
All purchases are recorded in the differences are reconciled.
the accounting system and in Supplier invoices and GRN before, or after the end of
the appropriate period. an accounting period are scrutinized and/or
reconciled to ensure complete and consistent
recording in the appropriate period.
Check that all supporting documents are reviewed
before approval for payment is made.Also check
that vendor payment is approved as per the chart of
All payment for purchases are
authority and credit period provided by the vendors
made only for goods actually
are utilised
received.
Check that all vendor invoices are marked in such a
manner that they cannot be submitted for payment
for second time.[tagging of bills]
SI.
Business Area Internal Control Objective Audit Program for Test of Control
No.
All other expenses incurred are All other expenses incurred are approved as per the
authorised. Chart Of Authority.
All other expenses incurred are All other expenses are reconciled with supporting
recorded accurately details and difference if any is resolved.
2 Other Expenses
Management reviews supporting documentation
Expenses are only made for
before approving payments. Supporting
goods or services received or
documentation is marked once payment is made to
valid expenses incurred
prevent duplicate payment.
All inventory procured are only Check that all goods received are against a valid
against approved indent for purchase order (which has been approved as per
procurement. the Chart Of Authority)
Ensure all receipts are checked for quality and
quantity; Check that all material received are
verified by actual weight
Check that procedure is in place to record
All goods received are as per excess/short receipt and to inform the same to the
the conditions of the purchase purchasing dept.
contract. Check materials received but not tested are
separately kept and marked until test certificate is
received.
Check that cement lot received is not more than 90
days old
Rejected raw materials are adequately segregated
from other raw materials and regularly monitored
to ensure timely return to suppliers.
Defective raw material are
returned to the supplier. Defective raw materials received from suppliers are
logged; the log is monitored to ensure that the
defective goods are returned promptly and that
3 Inventory Control
credit is received timely.
Ensure all receipts are accurately, promptly
recorded in inventory records
All goods received are recorded
Check whether there is any break in the sequence of
accurately.
GRN numbers. Any gap in the sequence are
reconciled.
Check that all issue of raw materials to the
All issue of raw materials to the
contractor are against 'indent for material
contractor are approved by
issue'(IMI). Check also that the IMI are approved by
proper authority.
the appropriate authority
Check that transfer of material to projects are only
All transfer of materials
against indent approved.
between Land Parcels are
approved by proper authority Check all transfer of raw materials are documented
Physically verify inventories at regular interval at
sites.
Inventory are under proper Security personnel monitor all incoming and
custody and free from frauds outgoing vehicles and ensure all goods leaving the
and error premises are accompanied by duly completed
documentation (e.g., delivery note or goods
returned note).
SI.
Business Area Internal Control Objective Audit Program for Test of Control
No.
Check that contracts entered into or work order
All contracts agreements/Work
issued to the contractor are within the authorisation
order issued are authorised.
limits as per the chart of authority.
Check that more than one quotations are taken from
contractors and the same are techno-commercially
All work orders/contract
evaluated.
agreement entered into are in
Check that where more than one quotation is not
the interest of the company
available, note for reason for single quotation has
been provided and approved.
Check that the contractor has executed and
submitted Corporate guarantee before the
commencement of any portion (package) of the
work. (Only for cases where such clause exists as
per work order or agreement)
Check that guarantee is kept valid upto the
completion of the work. (Only for cases where such
clause exists as per work order or agreement)
Check that the contractor has taken insurance and
submitted necessary documents as per the terms of
contract.(Only for cases where such clause exists as
per work order or agreement)
Contractor
4 Check that certified (by both contractor and proper
Management
authority) measurement sheet are attached with R.A
bill. Also check that R.A bills are attached with
supportings as mentioned in the contract.
Contract conditions are Check that monthly statutory compliance
complied with declaration and certified stock reconciliation
statement are attached with the R.A bill. Check that
the stock reconciliation statement are properly
calculated. (Only for cases where such clause exists
as per work order or agreement).
Check that retention money is held correctly as per
the terms of contract.Also check that R.A bill has
been calculated as per terms of the contract. (Only
for cases where such clause exists as per work order
or agreement)
Check that the retention money is not returned to
the contractor before the completion of the Defects
Liability period. (Only for cases where such clause
exists as per work order or agreement)
Check that contractor payment is authorised as per
the chart of authority before payment.
Check that arithmetical accuracy of the R.A bill is
checked before payment
SI.
Business Area Internal Control Objective Audit Program for Test of Control
No.
Check raw material consumption pattern as per
BOQ. Any significant deviation is analysed and
approved by the company. Also check that stock
reconciliation statement is submitted monthly with
every R.A bill and is approved by the company.
Check that the contractor maintains a Quality
Manual for the project. Also check the measures and
Contract conditions are
reports submitted by the contractor for Quality
complied with
assurance. (Only for cases where such clause exists
as per work order or agreement)
Check that the contractor maintains a Site Safety
Contractor Manual for the project. Also check the measures and
4
Management reports submitted by the contractor for Quality
assuance.(Only for cases where such clause exists as
per work order or agreement)
Check all change order requests are reviewed and
approved by proper authority.
Check that change order log is maintained by the
company.
Check that all change order requests are assessed
Change orders are authorised.
for possible impact (to project cost and
functionality) before approval. Check that
explanations,documented cost,schedule and
technical support are attached with Change Order
proposal.
Check that approval as per the Chart Of Authority is
taken prior to the acquisition of Fixed Asset.
All Fixed Asset acquisition are
approved Compare recorded changes to the fixed asset
register/ Fixed Asset account to authorized source
documents.
All Fixed asset acquired are
Reconcile asset acquisition supporting details with
properly recorded in the
entries in the Fixed Asset Register.
correct period.
Depreciation charges are Check that depreciation charges are calculated as
accurately calculated and per generally accepted accounting standard and at
5 Fixed Assets recorded. the prescribed rate.
Check that approval as per the Chart Of Authority is
taken prior to disposal of fixed asset.
All disposal of fixed assets are
approved Compare recorded changes to the fixed asset
register/ Fixed Asset account to authorized source
documents.
Review calculation of profit or loss for disposal of
All disposal of fixed assets are fixed asset. Also scrutinize the supporting
accurately recorded. documentation and the journal entry passed in this
regard. Also check GST Implication on the same
SI.
Business Area Internal Control Objective Audit Program for Test of Control
No.
Physically verify the fixed assets of the company
including at site.
Check whether system exists wherein security
5 Fixed Assets All fixed assets are safeguarded
personnel whether all goods leaving the premises
are accompanied by duly completed documents like
Goods Returned Note, delivery note etc.