Checklist for Finance Internal Audit

Internal audit is the examination of a company’s records and reports by its employees. Internal audits are usually intended to prevent fraud and to ensure compliance with board directives and management policies.

In contrast, the financial statements presented to stockholders are typically prepared by outside parties to ensure absolute objectivity Internal financial audit is very important for every organization.

Checklist for Internal Financial Audit.

Sr.No Particulars Checked By Remarks
A Stock
Check that
1 Age wise analysis of FG is done on monthly basis by the stores keeper and authorised by Manager Commercial
2 Physical verification is done monthly by unit staff
3 Proper classification of Non Moving Stock is done by unit
4 Above records are verified by Manager Commercial and reported to Unit Head, which further reports it to Finance Officer
B Cash
1 Physical cash in custody of Accounts assistant at least once a month, prefer surprise checks
2 The minimum & maximum cash balance at any point of time is Rs.10,000 and Rs. 1 Lac respectively
3 That physical cash is verified by person other than the person in who’s custody cash is kept, which is further approved by unit Head
4 Payments > 20000 are made through cheque
5 That Assistant finance manager’s surprise physical verification of the cash, done at-least twice a month
6 Cash Withdrawal Note for withdrawal of cash from bank which is authorised by Unit Head
C Bank
Check that
1 Minimum bank balance at any time is Rs 5000
2 Balance above a specified limit is invested in FD by approval of AFM
3 Monthly BRS is prepared by Mang. Comm and is sent to AFM after Unit Head’s authorisation
4 The Cheque Details Register maintained by Ass. A/cs and vetted by Unit Head
5 The acknowledgement of the cheque received from the third party and the cheque issued to the third party
6 Proper recording of Bank Charges on monthly basis and informing the same to Unit Head and AFM
D Debtors
Check that
1 Age wise analysis on monthly basis is done by MC and the same is reported to Unit Head who forward it to AFM
2 Credit period & interest thereon as per Sales & Finance Policy
3 Quartly balance confirmation & turnover ratio is done by MC & reported to Unit Head
E Creditors
Check that
1 Payment is made through cheque only
2 Maximum credit period of 30 days or discount, as the case may be is availed
3 The Creditors Turnover Ratio is calculated on monthly basis
F Real State Property
Check that
1 Proper listing of documents is done in the prescribed format
2 All original & chain doc are kept in custody of Unit Head
3 Physical verification is done by person appointed by UH & Managerial Personnel and reporting of same to AFM
4 Search Report is obtained at the time of purchase.
5 Insurance of Property- documented with Unit Head, Copy is kept with A/cs Dept.
G Investments
Check that
1 Proper Investment Register for recording of investments and its verification by UH is done
2 New investments are made only after proper approval by AFM
3 Proper investment note is prepared by the Finance Officer.
4 The original documents of the investments are secured by the Unit Head
H Loans & Advances
Check that
1 Proper requirement assessment is made by UH
2 Comparative Rate Analysis is done by UH, which is approved by the BOD
3 Proper documentation & A/cing is done by FO
4 Loan to Staff is as per Loan Policy

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