This presentation takes one through the basic mistakes often made while performing the internal audit function and calls for introspection of the internal audit function on a timely basis. It also defines the manner in which an internal audit function is to be approached.

1. not My topic today - Internal Audit is a business decision making tool. Trust None Gujarat CA Sandesh Mundra

12. With some bad jobs in the pocket the cash flows start getting adversely affected. To make matters worse, huge investments are being made in Equipment purchase to cut down the rental cost. Because of poor accounting systems the organisation is not able to maintain the project wise accounting and hence the losses are not traced to any particular project. CA Sandesh Mundra

16. He presents the same report again to the management in a summarised format, to give a feeling that there was no lapse in audit procedures adopted for Site - "X". Also points out the failure on the part of the management in taking the previous audit report in a casual manner. - Interpretation CA Sandesh Mundra

18. Auditor is very unhappy! CA Sandesh Mundra

25. Thief and Police There are three categories in which we can divide the police :- a. Those who are not able to catch the thief b. Those who catch the thief after he has stolen something c. Those who catch when the idea of theft originates in the thief's mind CA Sandesh Mundra

26. “ When business fails, accountants perform” CA Sandesh Mundra

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32. Telecom Call Centre CA Sandesh Mundra

35. The Audit Process Model CA Sandesh Mundra

36. Audit Interaction with Auditee CA Sandesh Mundra

39. Domain of Decision Making Strategic Planning Operations CA Sandesh Mundra

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44. Enterprise Risk Management Two most important ways that internal auditing provides value to the organization are in providing objective assurance - that the major business risks are being managed appropriately and - providing assurance that the risk management and internal control framework is operating effectively. CA Sandesh Mundra

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50. The Objective of Risk-Based Planning: Target audit resources where risk is greatest! Source: A Guide to the Use of Risk Management Within the Internal Audit Process © 2002 – The IIA – Australia Probability Impact H L H

52. Risk Planning Model PROBABILITY PROBABILITY Risk Assessment in Annual Planning: MATERIALITY Visibility and Sensitivity Impact on Enterprise Operations

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61. S.No. Particulars 1 Delay in possession of site 2 Productivity of equipment 3 Unavailability of equipment, spares, fuel 4 Inappropriate equipment 5 Weather Poor quality, productivity and unavailability of labour 6 Capability of professional staff – Incompetence, unreasonableness 7 Poor industrial relations with Suppliers 8 Labour – sickness, absenteeism 9 Poor supply, suitability and unavailability of materials 10 Poor quality, productivity and unavailability of subcontractors 11 Safety – accidents 12 Failure to construct to programme & specification 13 Poor workmanship 14 Ground conditions – inadequate site investigation, inadequate information in documents, unforeseen problems 15 Mistakes while performing work Poor relationship of professional staff to each other – consultants, architects, subcontractors, etc. 16 Coordination failure of construction Workers 17 Liaison with public services 18 Irregularity of work load 19 Theft 20 Errors or omissions and additions in bills of quantities 21 Insufficient time to prepare bid tenders 22 Accessibility to the site 23 Damage during transportation or storage 24 Damage during construction due to negligence of any party, vandalism, accident 25 Errors or omissions and additions in bills of quantities