Company name

Internal Audit Report 2011-12 Report # 4 Area :

Table of Contents

S. No.

Particulars

Page

Background 1 2

Audit Report 5

Background Firm name, chartered accountants, Location Page 1

Company name

Internal Audit Report 2011-12 Report # 4 Area :

1. The Terms of Reference of the Internal Audit of Client Name for the year 2011-12 required the following areas to be covered at ( Unit ) in February 2012 Inventories

2. The objective of the audit was to assess the Entitys status in relation to the following Efficiency and Effectiveness of key processes and controls Accuracy of transactions Adequacy, comprehensiveness, relevance and compliance with established policies and practices. 3. Our broad coverage of inventories included the following Controls over receipts Controls over issues Storage and Stacking norms Physical verification protocols Inventory valuation

4. We adopted a transaction testing ( or Risk Based ) approach for this audit. Our methodology also covered a combination of procedures such as discussions, walk through reviews, inquiries, tests of compliance and substantive checking of various transactions to validate existence of satisfactory controls, commensurate with the size and nature of operations of the unit. 5. We understand that operation of systems, procedures and controls are the responsibility of the entitys management. Our responsibility is to identify certain weaknesses in internal controls, risk management and governance framework and highlighting any exceptions and cases of non-compliance and suggest or recommend improvements in the design and operations of controls based on the internal audit in respect of areas detailed in this report.

Firm name, chartered accountants, Location

Page 2

Company name

Internal Audit Report 2011-12 Report # 4 Area :

6. Our audit work complies with the generally accepted audit procedures in India, as applicable for internal audits. Our audit procedures were limited to the subject areas stated in Scope of Work detailed in this report. We have not conducted an audit to express opinion on the financial statements or specified elements, accounts or items thereof. Accordingly, we have not expressed any such opinion in the reports issued to the management during the period. 7. Our audit presented findings on significant control weaknesses in design as well as operating effectiveness in the control environment noted by us during the course of engagement, impact of such weakness, recommendations for addressing the control weaknesses, mitigating risks and for strengthening the control environment in respect of areas covered during the period, detailed under Scope of Work.

8. The audit field work in relation to the above areas was conducted during ________,
2012 to ______, 2012 and the draft report containing our preliminary findings was issued to the management on ________, 2012. The results of our work have been discussed with the relevant personnel and their comments in relation to the same have been included in this final report issued on _________. We would like to thank the personnel of the unit for their support during the audit. Our audit procedures were limited to the subject areas stated in audit coverage. 9. We have not conducted audit to express opinion on the financial statements or specified elements, accounts or items thereof. Accordingly, we have not expressed any such opinion.

10.The audit report is attached with pages _ to _ serially numbered for identification

Signed Member / Partner Name Mem No Firm Name Firm Reg Number Firm name, chartered accountants, Location Page 3

Company name

Internal Audit Report 2011-12 Report # 4 Area :

Audit Report Observation Observation / audit finding is written here Impact The impact of the point Recommendation The recommendations that would address the issue Management Comment All management comments should start with Agreed, and give the comments on why it happened and that they will take care and the following box is also added Responsibilit y Target date Responsible Manager for Implementation Date when the same expected completion End of the report At the end of the report, the same has to be signed by the Partner, CEO / CFO of the business and the audit department Head. A format is attached as under: Sign Partner name & mem no Firm name & number Sign CEO / CFO Sign Auditee Dept head can be for

Firm name, chartered accountants, Location

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