Design an audit program for a manufacturing organization
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REVIEW OF PURCHASE PLANNING
i. Whether purchase planning is centralised or decentralised.
ii. Check the role of Head Office/Works in formulating the purchase plans.
iii. Ascertain the criterion/factors considered for finalising purchase plans.
iv. Whether planned purchases are compared with actual purchases at regular intervals.
v. Ascertain the system of co-ordination/communication followed among various departments, such as, Purchase department, Production department, Sales department, Marketing department, etc., and discrepancies, if any.
vi. Whether the authority and responsibility for preparation, monitoring, modification, cancellation of purchase plan has been formally and appropriately decided.
vii. Whether book stocks are reviewed at the time of placing order vis-a-vis average consumption.
PRELIMINARY STEP
i. Study the system and procedures for purchases.
ii. Review of Purchase Manual, if any, and adherence to it.
iii. Study of various documents used by the Purchase department.
iv. How is the scheduled delivery dates arrived at in case User department forwards Purchase Requisitions (PR)?
v. Whether too many PRs are unnecessarily being received by the Purchase department that can be avoided in respect of repetitive and regular consumable materials.
VENDOR ANALYSIS
i. Criteria for selection of vendors.
ii. Frequency of vendor analysis.
iii. Database maintained for vendors – Master data and its updation.
iv. The procedure followed for inspection/approval of sample received from different vendors.
v. Whether attempts are made to procure form alternate sources of supply instead of traditional suppliers. Find out the culture within the company to create new vendors. Check out whether comparative quotations are obtained before placing the orders with the party.
REVIEW OF QUOTATIONS
i. Authority for finalising the rates.
ii. Whether invitation for quotations are restricted to only local markets and traditional suppliers for the company.
iii. Justification for placing an order above the lowest price.
iv. Whether a system of comparing price fluctuation of the material at reasonable intervals exists or not.
v. Identify the material under Annual Rate Contract and the periodicity of reviewing the same.
vi. Whether sufficient time is allowed by the User department to enable Purchase department to have reasonable time to invite quotations.
vii. Ascertain the procedure followed for preparing a comparative quotation chart and its authorisation.
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i. Whether purchase planning is centralised or decentralised.
ii. Check the role of Head Office/Works in formulating the purchase plans.
iii. Ascertain the criterion/factors considered for finalising purchase plans.
iv. Whether planned purchases are compared with actual purchases at regular intervals.
v. Ascertain the system of co-ordination/communication followed among various departments, such as, Purchase department, Production department, Sales department, Marketing department, etc., and discrepancies, if any.
vi. Whether the authority and responsibility for preparation, monitoring, modification, cancellation of purchase plan has been formally and appropriately decided.
vii. Whether book stocks are reviewed at the time of placing order vis-a-vis average consumption.
PRELIMINARY STEP
i. Study the system and procedures for purchases.
ii. Review of Purchase Manual, if any, and adherence to it.
iii. Study of various documents used by the Purchase department.
iv. How is the scheduled delivery dates arrived at in case User department forwards Purchase Requisitions (PR)?
v. Whether too many PRs are unnecessarily being received by the Purchase department that can be avoided in respect of repetitive and regular consumable materials.
VENDOR ANALYSIS
i. Criteria for selection of vendors.
ii. Frequency of vendor analysis.
iii. Database maintained for vendors – Master data and its updation.
iv. The procedure followed for inspection/approval of sample received from different vendors.
v. Whether attempts are made to procure form alternate sources of supply instead of traditional suppliers. Find out the culture within the company to create new vendors. Check out whether comparative quotations are obtained before placing the orders with the party.
REVIEW OF QUOTATIONS
i. Authority for finalising the rates.
ii. Whether invitation for quotations are restricted to only local markets and traditional suppliers for the company.
iii. Justification for placing an order above the lowest price.
iv. Whether a system of comparing price fluctuation of the material at reasonable intervals exists or not.
v. Identify the material under Annual Rate Contract and the periodicity of reviewing the same.
vi. Whether sufficient time is allowed by the User department to enable Purchase department to have reasonable time to invite quotations.
vii. Ascertain the procedure followed for preparing a comparative quotation chart and its authorisation.
PLEASE FOLLOW ME GUYS
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