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Internal Audit Process - The SME business

Internal audit is the independent management function in SME business management consultancy

1. Decide the scope of internal audit

2. Develop an audit plan

a) Production department: Analyze the production compare with the standard production quantity and check the efficiency i.e the the time taken for the given quantity of production

b) Quality control department: Cost of poor quality which involves below par good manufactured, scraped goods, amount spent on rectification of the below par goods. Analyze PPM i.e parts per million which indicate the quantity of below par goods, analyze the trend over the past periods.

c) Finance Department

Analyze the debtor and creditor ageing and inventory ageing. Whether different taxes have been levied, collected and deposited. On sample basis check the routine journal entries and check all the unusual journal entries such as amalgamation, merger etc. Check the provisions made in the accounting period and whether they are appropriate.

d) Personnel and administration: Check for all the labor welfare compliance. Payments to employees and workers have made on time. Statutory returns have been filed on time. The entity hold all the certification as required by the authorites.