Internal Audit and Cost Audit

7/21/2019 Internal Audit and Cost Audit

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INTERNAL AUDIT& COST AUDIT

GROUP MEMBERS

SAGAR MOJIDRA 1401

SANTOSH GUPTA 1373


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INTERNAL AUDIT


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MEANINGInternal a!"t"n# "$ an "n!e%en!ent '()e*t"+e a$$ran*e an! *'n$lt"n# a*t"+"t

t' a!! +ale an! "-%r'+e an 'r#an".at"'n/$ '%erat"'n$ It el%$ an '

a**'-%l"$ "t$ '()e*t"+e$ (, (r"n#"n# a $,$te-at"* !"$*"%l"ne! a%%r'a* t' e+

"-%r'+e te e22e*t"+ene$$ '2 r"$ -ana#e-ent *'ntr'l an! #'+ernan*e %r'*e$$

OBJECTIVESTe -a"n '()e*t"+e$ '2 "nternal a!"t are t' %r'+"!e a$$ran*e 'n te a!e

5'le *'ntr'l en+"r'n-ent a!+"$e at an earl, $ta#e "n te "-%le-entat"'n '2

!e+el'%-ent$ 'r a-en!-ent$ t' %r'*e$$e$ !e+el'%-ent an! "-%le-e

'r#an".at"'nal %'l"*"e$Internal A!"t %r'+"!e a$$ran*e tat te 'r#an".at"'n6$ +ale$ are -et an! t

re#lat"'n$ are *'-%l"e! 5"t It en$re$ tat 2"nan*"al $tate-ent$ an! 'ter

"n2'r-at"'n are a**rate an! rel"a(le an! tat -an 2"nan*"al an! 'ter re$

-ana#e! e22"*"entl, an! e22e*t"+el,

Internal a!"t al$' 2'r-$ %art '2 te 5"!er ant"2ra! an! ant"*'rr%t"'n 2ra-

*'-%an,


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NEEDS OF INTERNAL AUDIT In*rea$e! $".e an! *'-%le8"t, '2 ($"ne$$e$

Enan*e! *'-%l"an*e re"re-ent$

9'*$ 'n r"$ -ana#e-ent an! "nternal *'ntr'l$ t' -ana#e te-

Un*'n+ent"'nal ($"ne$$ -'!el$

Inten$"+e $e '2 "n2'r-at"'n te*n'l'#,

Str"n#ent n'r-$ -an!ate! (, re#lat'r$ t' %r'te*t "n+e$t'r$

An "n*rea$"n#l, *'-%et"t"+e en+"r'n-ent

INTERNAL AUDIT ADDING VALUE TO ORGANISA R"$ Mana#e-ent

Pr'+"!"n# A$$ran*e Re#ar!"n# Internal C'ntr'l$

C'-%l"an*e

9ra! Dete*t"'n

C'n$lt"n# an! O%erat"'n$


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PRINCIPALS OF INTERNAL AUDIT


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INTERNAL AUDIT AS PER COMPNAIES ACT, 2013SECTION (138) Te C'-%an"e$ A*t :013 %r'+"!e $tatt'r, re*'#n"t"'n t"$ area a$ '%ene! a $*'%e '2

A**'ntant$ an! 'ter$ %r'2e$$"'nal$

Se*t"'n 13;


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APPLICABILITY OF INTERNAL AUDIT


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FUNCTIONS OF INTERNAL AUDITOR

En$re te *'rre*tne$$ an! *'-%letene$$ '2 a**'nt$

E8a-"ne te a**'nt$ t' en$re re#lar"t, "n e8%en!"tre

L'' "nt' te %r'%r"et, '2 te 2"nan*"al tran$a*t"'n

En$re tat te re$'r*e$ e8%en!e! (, te e8e*t"+e a+e %r'!*e! !e$"re! re$lt

>ee% a *'n$tant +"#"l 'n all 2"nan*"al !eal"n#$ an! tran$a*t"'n$ "n te 'r#an".at"'n

9"n! 't 5eter tere a+e (een an, 2"nan*"al "rre#lar"t, 'r -al%ra*t"*e "n "n

e8%en!"tre.

P'"nt 't -"$tae$ an! "n!"*ate '5 te, *an (e re*t"2"e! an! a+'"!e! "n 2tre

?er"2, te %,$"*al a*"e+e-ent$ '2 $*e-e$@%r')e*t$ "n te In$t"tt"'n$


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INTERNAL AUDIT PROCESS

1 PLANNING

: PER9ORM AUDIT 9IELDOR>

3 RIS> COMPOSITION

4 RIS> MANAGEMENT PROCESS

R"$ "!ent"2"*at"'n

R"$ al"2"*at"'n & %r"'r"t".at"'n

R"$ -'n"t'r"n#

R"$ -"t"#at"'n & a+'"!an*e

1 REPORT RESULTS

: 9INALIE AUDIT OR>

3 RE?IE 9INAL REPORT

4 9INAL REPORT

9OLLO UP


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AVOID PITFALLS

Ri!"#$ C!"%&'# CIA a$ $are! "$ e8%er"en*e a('t 2a"lre '2 "nter

a$$"#n-ent$ He a$ -ent"'ne! %"i* #'"+* +# -!' "i/#''2 "nternal a!"t

1N't $ett"n# a$"!e '*+/! -i%' -+ #+'# "* -!' "/$i- +#4. P#+'# "**

#l'r"'$ r'a! t' $**e$$2l a!"t 5'r

:Tr,"n# t' a!"t -++ %/!, &' #''5"*- -+ #i4 >ee% 'ne e,e 'n #''5"*'

(e"n# !'ne 5"t '+erall '()e*t"+e$ '2 te a!"t

3N't "n+'l+"n# -!' i'*- +# -!' "/$i-'' '#+**'.49a"l"n# t' a#-ent te a!"t tea- 5"t /*-i+*" '6'#-i'

9'r#ett"n# tat te a!"t $'l! lt"-atel, "$$ 5"/'.

F9'r#ett"n# t' 2'll'5 -!' #i4. N' #i4 -a, e-er#e !r"n# te %r'#re$$ '2 a

Can#e 5'r %lan a**'r!"n# t' te-

INTERNAL VS E7TERNAL AUDITING


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INTERNAL VS. E7TERNAL AUDITINGSr.

No.

I*-'#*" A/$i- E6-'#*" A/$i-

1Internal a!"t'r$ are a%%'"nte! an! re-'+e! (,te -ana#e-ent '2 te *'-%an, an, t"-e

E8ternal a!"t'r$ are a%%'"nte! an! re-$are'l!er$ !"re*tl, !r"n# AGM

2Te $*'%e '2 I@A "$ -* (r'a!er an! *'+er$ allr"$$ t' a ($"ne$$ ent"t,

Te $*'%e '2 E@A "$ $%e*"2"e! "n te ter-$"#ne! 5"t te *'-%an,

3

Te '()e*t"+e '2 I@A "$ t' el% -ana#e-ent "nr"$ -ana#e-ent an! a!! +ale (, *reat"n#e22"*"en*, "n $,$te-$ an! 2"nall, '(ta"n te'()e*t"+e$ '2 a ($"ne$$ ent"t,

Te '()e*t"+e '2 E@A "$ t' re%'rt 'n 2a"rne$$ '2 te 2"nan*"al $tate-ent$ (n!erl,"n# re*'r!$ an! (a$e! 'n te e+"!en*e #atere! !r"n# te 5'r

4Internal a!"t'r$ re%'rt t' te a!"t *'--"ttee

E8ternal a!"t'r$ re%'rt t' te re%re$entat"+e$ te -e-(er$ 'n te ('ar!Te, !"re*tl, "ntera*t 5"t -e-(er$ 5AGM 'r EGM

5

Te re%'rt '2 "nternal a!"t'r$ "$ $are! 5"t-ana#e-ent +"a a!"t *'--"ttee

Te re%'rt '2 e8ternal a!"t'r$ "$ $a$are'l!er$ an! a2ter (e"n# %(l"$e! "%(l"* "n te *a$e '2 l"$te! *'-%an, *a%"tal 2r'- %(l"*


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FORMAT OF INTERNAL AUDITREPORTPeriodPlace

Audit Team

Supervision

Audit Scope

Transaction Vouching, Inventory System Co

Internal Controls, Intra Unit Transactions,

Excise Records,

TDS, FBT and Service TaxAudit Observations

1. Audit Observation.

System Weakness

Suggested Improvements


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COST AUDIT


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INTRODUCTION

It "$ te !eta"le! *e*"n# '2 te *'$t"n# $,$te- te*n"e an! a**'

+er"2, te"r *'rre*tne$$ an! t' en$re a!eren*e t' te '()e*t"+e '

a**'ntan*,

ICMA LONDON

An a!"t '2 e22"*"en*, -"nte !eta"l$ '2 e8%en!"tre 5"le te 5'r

%r'#re$$ an! n't a %'$t -'rte- *'$t a!"t "$ -a"nl, a %re+-ea$re a #"!e 2'r -ana#e-ent %'l"*, an! !e*"$"'n "n a!!"t

(e"n# (ar'-eter '2 %er2'r-an*e

ICAI INDIA


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OVERVIE In!"a 5a$ te 2"r$t *'ntr, "n S't A$"a


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OBJECTIVES1 9r'- te %er$%e*t"+e '2 -ana#e-ent

: 9r'- te %er$%e*t"+e '2 $are'l!er$

3 9r'- te %er$%e*t"+e '2 te #'+ern-ent

4 9r'- te %er$%e*t"+e '2 *$t'-er$

9r'- te %er$%e*t"+e '2 *'$t a**'ntant$

T+ "'- + C+- A/$i-

P#+'#- "/$i-

Eii'* "/$i-

A!"t "$ *'n!*te! t' en$re tat

1 e+er, r%ee "n+e$te! #"+e$ te -a8"-- retrn

: Balan*"n# '2 "n+e$t-ent (et5een !"222erent 2n*t"'n$ '2 *'-%an, !e$"#ne! t' -a8"--


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Di'#'*' &'-''* Fi*"*i" A/$i- "*$ C+- A/

Fi*"*i" A/$i- C+- A/$i-

It "$ $tatt'r"t, *'-%l$'r, n!er C'-%an"e$A*t

It "$ n't *'-%l$'r, e8*e%t "n *ea$ %r'+"!e! n!er $e*t"'n :33B

It *'+er$ all te 2"nan*"al tran$a*t"'n$re*'r!e! "n 2"nan*"al (''$ an! 2"nan*"alre*'r!$

It *'+er$ 'nl, *'$t re*'r!$ a**'nt$

It a"-$ t' e8a-"ne tat te ($"ne$$tran$a*t"'n$ a+e (een re*'r!e! *'rre*tl,

It a"-$ t' +er"2"*at"'n '2 *'$t a**en$re$ te %lan %re%are! *'nne*t"'n a$ (een !l, e8e*t

It "$ *'n*erne! 5"t te %a$t an! "$t'r"*al "n

natre

It *'n*erne! 5"t 2'r5ar!

a%%r'a*

Re%'rt"n# te tre an! 2a"r +"e5 '2 te*'-%an,/$ earn"n#$ an! $tate '2 a22a"r$

C'$t A!"t'r "$ re"re! t' re%'r-ana#e-ent e8*e%t $tatt'r, a

9"nan*"al a$%e*t '2 te a**'nt$ "$ a -atter '2*'n*ern

C'$t a$%e*t '2 a**'nt "$ '2 -a"n

It "$ *'n*erne! 5"t te $*rt"n, '2

rel"a("l"t, 'r 'ter5"$e '2 tran$a*t"'n$

It "$ *'n*erne! 5"t te %r'

e22"*"en*, '2 te tran$a*t"'n$


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ADVANTAGES OF COST AUDIT TO CONSUMER Re+eal$ tre *'$t '2 %r'!*t"'n

J$t"2, te %r"*e

ADVANTAGES OF COST AUDIT TO GOVERNMEN

Hel%$ tar"22 ('ar!

Hel% t' -ea$re an! "-%r'+e te e22"*"en*, '2 $"* "n!$tr"al n"t

Re+eal 2ra!lent "ntent"'n '2 -ana#e-ent

Hel% "n %r"*"n# +ar"'$ *'--'!"t"e$

Hel%$ "n ta8 "-%'$"n# !e*"$"'n


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T9AN; YOU

Internal Audit and Cost Audit

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