Case Studies

Internal Audit

About Client
  • The client is the largest Auto Ancillary group with a turnover of over US$ 2.2 billion.
  • The company also has the distinction of being India's leading two wheeler tyre manufacturer , rolling out over 9 million tyres annually and enjoying highest share with Vehicle manufacturer backed by a strong network of over 2050 Dealers and 20 Depots across the country.
  • An entity Level Risk Assessment was conducted by the client. The board wanted to have a detailed review of the areas identified as most riskier. Following were the needs with reference to these specific areas.
  • Efficiency in raw material consumption and issues in accounting for consumption and wastage at various stages.
  • Manual planning for material procurement leading to issues like procurement of unwanted material and shortage of required material.
  • Inadequate accounting for machinery and labour hours leading to difficulties in monitoring.
  • Difficulties in project monitoring and project assessment.
Our Scope
  • Conduct a Process Based Internal Audit of the process in the organization coupled with risk assessment.
Benefits for Client
  • Client is a company with diversified business, multi SBU company with its shares listed in leading stock exchanges in India. There was a need to review the Internal Controls and scientifically comment on the risk profile of the organization. As a fast growing company, the Board felt the need for streamlining its operations and for an effective internal control system in various SBUs and adopt the best practices.
  • With different product line in its portfolio, there was a need to customize the audit approach based on the requirements of each such product line.
  • The management also wanted us to comment on the performance of the SBU in comparison to its peers within the company and in the general industry.
  • To perform a comprehensive review of their in-house developed software application in VB/VB.Net on MS SQL Server before implementing across all the locations

About Client
  • Client is a leading pump manufacturing company with manufacturing facilities in 5 locations and selling its products through about 30+ branches at multiple locations.
  • The company's IT setup consists of Oracle ERP application with users spread across multiple location which are interconnected through a centralized network
  • CRI needed to assess the existing level of information security process prevalent in the company.
Our Scope - Process Auditing
  • Conduct a Process Based Internal Audit of the process in the organization coupled with risk assessment.
  • Conduct review of compliance with statutory norms & internal policy and verify the accuracy of transaction reflected in accounting records on a monthly basis for selected key areas.
  • Regular review of the implementation of various actions initiated out of the audit.
  • Identify and review the key performance indicators.
Our Scope - IT Auditing
  • Assessed the capability of the software in meeting the business requirements of Client
  • Reviewed the effectiveness of the application controls built into the application modules
  • The scope includes the coverage of the business process carried out at the 5 geographic locations of the company and across all the business units
Benefits for Client - Process Auditing
  • Scientific measurement of risk and exposure thereby fulfilling governance reporting requirement of the board. The risk exposure levels reduced year on year.
  • Assurance towards adoption of company policy and procedure.
  • Statutory non compliance identified.
  • With a humble start the organization is above their peers in various operational parameters. Value addition in terms of cost reduction to the tune of Rs. 1 Crore and Rs. 2.5 Crores in the past two years.
  • Regular monitoring has helped the organization in taking corrective action for deviation identified at a very early stage. Few example of the internal control issues identified and corrected as below
  • Seed cane supplied to the Ryots more than the required Qty and huge difference between estimated cane yield Vs Actual cane supply leading possibility of cane seed/ cane unauthorized cane diversion.
  • Analysed and recommended planning & deployment of Casual Workers thereby decreasing their engagement. Unauthorised payment of wages was also identified and curtailed.
  • Physical Verification of Assets was carried out to determine the physical existence, control over their movement and condition of the asset for valuation purpose. Unutilized asset to the extent of Rs. 1.08 crores was identified and appropriate action taken.
Benefits for Client - IT Auditing
  • Clear understanding of the gaps that were not addressed in the application with prioritization based on the criticality of the requirements to facilitate development / fine-tuning and implementation
  • Application controls that were not adequately addressed in the application with the ranking of their risk levels to prioritize the same.
  • Necessary IT infrastructure requirements were recommended to implement the application across all the location with centralized server setup.