Internal Audit Work Program
Company Name: [Company Name]
Audit Period: [Financial Year 2024-25]
Prepared by: [Your Name]
Approved by: [Audit Manager/Partner Name]
1. Objectives of Internal Audit
Assess the effectiveness of internal controls.
Ensure compliance with regulatory and company policies.
Identify process inefficiencies and provide recommendations.
Evaluate financial and operational risks.
2. Scope of Internal Audit
The audit will cover the following areas:
1. Manufacturing Controls
2. Supply Chain Management
3. Financial Controls
4. Compliance & Regulatory Audit
5. Dealer & Distribution Audit
6. Technology & ERP Controls
3. Audit Work Plan by Functional Area
A. Manufacturing Controls
Audit Activity Work Steps Responsibility Timeline
Production Yield & Compare actual vs. standard production yields,
Audit Associate Week 1-2
Variance Analysis investigate variances.
Quality Control Review testing logs, reject rates, and customer
Senior Auditor Week 2-3
Compliance complaints.
Raw Material Usage & Check material reconciliation reports for
Audit Associate Week 3
Wastage discrepancies.
Conduct process walkthroughs, check training
SOP Adherence Senior Auditor Week 3-4
records.
B. Supply Chain Management
Audit Activity Work Steps Responsibility Timeline
Review selection, rating, and payment
Vendor Management Audit Associate Week 2
processes.
Inventory Aging & Identify slow-moving & obsolete stock, analyze
Senior Auditor Week 3
Valuation valuation.
Logistics & Supply Chain Assess disruption plans, review contingency
Audit Manager Week 4
Risks strategies.
C. Financial Controls
Audit Activity Work Steps Responsibility Timeline
Revenue & Margin Check pricing approvals, discount structures, and
Senior Auditor Week 3-4
Analysis gross margin trends.
Credit Limit & Review debtor balances, overdue accounts, and
Audit Associate Week 4-5
Receivables provisions.
Cost Control & Assess raw material variance, cost allocation
Audit Manager Week 5-6
Overheads methods.
D. Compliance & Regulatory Audit
Audit Activity Work Steps Responsibility Timeline
Environmental Review pollution control records, VOC emissions
Audit Associate Week 3
Compliance tracking.
Check fire safety, PPE compliance, minimum wage
Safety & Labor Laws Senior Auditor Week 4
payments.
Verify GST returns, TDS payments, and statutory
Tax & GST Compliance Audit Manager Week 5
filings.
E. Dealer & Distribution Audit
Audit Activity Work Steps Responsibility Timeline
Dealer Appointment Validate documentation, credit evaluation
Audit Associate Week 4
Process criteria.
Secondary Sales &
Verify incentive schemes, rebate calculations. Senior Auditor Week 5
Incentives
F. Technology & ERP Controls
Audit Activity Work Steps Responsibility Timeline
Review user roles, segregation of duties, and access
System Access Controls IT Auditor Week 5
logs.
Master Data Validate accuracy of pricing, vendor, and inventory
Senior Auditor Week 6
Management master data.
4. Audit Execution & Deliverables
Audit Phases
Phase Key Activities Duration
Phase 1: Planning Define scope, gather preliminary data, risk assessment. Weeks 1-2
Phase 2: Fieldwork Perform control testing, sample verification, process reviews. Weeks 3-6
Phase 3: Reporting Draft reports, discuss findings with management, finalize report. Weeks 7-8
5. Reporting & Follow-Up
Deliverable Frequency Responsibility
Monthly Key Observations Report Monthly Senior Auditor
Quarterly Trend Analysis Report Quarterly Audit Manager
Final Internal Audit Report End of Audit Audit Partner
6. Key Performance Indicators (KPIs)
Metric Target
Production yield variance <5%
Quality rejection rate <2%
Inventory turnover ratio >6 times per year
Operating margin 15-20%
Debtor collection period <60 days
Statutory compliance issues 0 instances
Conclusion
This Internal Audit Work Program provides a structured approach to evaluate internal controls,
improve processes, and mitigate risks in the paint manufacturing operations