monthly Internal Audits

Introduction

Internal audit provides independent assurance on the effectiveness of internal controls and risk management processes to enhance governance and achieve organisational objectives. It help in evaluating the design and operating effectiveness of internal control and risk management process as designed and implemented by the management.

Requirement of Internal Audit

Section 138 of Companies Act 2013 read with Rule 13 of Companies (Accounts) Rules 2014 requires certain class of companies to appoint Internal Auditors. Following are the class of companies required to internal auditor:

Every listed public company
Every unlisted public company having

Paid up share capital of fifty crore rupees or more during the preceding financial year; or.
Turnover of Two hundred crore rupees or more during the preceding financial year; or
Outstanding loans or borrowings from bank or public financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year; or
Outstanding deposit of twenty five crore rupees or more at any point of time during the preceding financial year.

Every private company having

Turnover of two hundred case or more during the preceding financial year; or
Outstanding load or borrowings from banks or financial institutions exceeding one hundred crore rupees or more at any point of time during the preceding financial year:

General Audit Procedures (Monthly)

GST R1 (sales) as per GST vs Sales R1 as per Tally.
GST R2 (Purchase) as per GST vs Sales R2 (Purchase) as per Tally.
Audit of GST Payment Ledger Vs GST Payable (Paid Leder) in Books of Accounts.
Audit of GST Payable Ledger in tally Vs Monthly GST 3B filled and recording differences in Narration of the voucher.
Audit of TDS Entry (TDS Deducted ) as per Quarterly TDS Return Filed Vs TDS Entry in Tally (Non Salary TDS Returns) .
Audit of TDS return Filed - TDS Challan Paid vs TDS Payable Ledger Entry in Books of Accounts (Non Salary TDS Returns).
Audit for All bank Accounts Bank Reconciliation & Balance as per Bank Statement Vs Balance as per Tally (booking Audit Narration entry)
Audit of Salary TDS Return - TDS Deducted Vs TDS Payable (Salary) Ledger Booked in Tally for Salaries.
Audit of Salary TDS Return - TDS Challan Paid Vs TDS Payable (Salary) Ledger Booked in Tally for Salaries.

General Audit Procedures (Quarterly)

Audit of Company master - Address actual vs Income Tax, TDS, GST, ROC & IEC Department Records.
Audit of Company master - List of Directors actual vs Income Tax, TDS, GST, ROC & IEC Department Records.
GST R2 (Purchase) as per GST vs Sales R2 (Purchase) as per Tally. (for Quarterly Inputs.
Audit of Directors Salary Payable Books vs Salary TDS Return Vs Actual or as Planned.

Benefits of Internal Audit

The benefits of internal audit are as:

Continuous assessment of company’s accounting practices
Risk control on ongoing basis
Ensure integrity of financial statement and accounting information and prevent fraud
Ensure regular compliance with laws and regulation
Can help in looking broader issues such as impact on goodwill , operational efficiency, growth

Procedure

The Internal Audit function requires a number of activities to achieve its objective as outlined in the terms of engagement. Few are general steps that are followed while internal audit:

1. 1. 1. Define the overall plan, scope and methods to be followed during the process of the Internal Audit on a periodic basis.
    2. Oversee and monitor various audit assignments, their proper planning, execution, reporting of
    3. Findings and ensure subsequent closure of reported observations.
    4. Plan and review the performance of professional staff and other resources to achieve its objectives.
    5. Identify and manage external experts and technical solutions, if required.
    6. Communicate and engage with all key stakeholders regarding progress and achievement of objectives.
    7. Develop and maintain a quality evaluation and improvement program

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