This sample audit report summarizes an internal audit review of a company’s treasury operations at its headquarters. It provides primary opportunities for improvement, which were identified through interviews and process observations with treasury personnel and limited transaction testing. Objectives include assessing and evaluating the adequacy of the overall financial control environment and significant financial and accounting controls.
The following key observations were noted during the review:
- Treasury department policies and procedures are outdated in all areas (cash management, wire transfers, foreign exchange, treasury accounting, subsidiary procedure-related policies). Formal, written cash management or treasury accounting policies do not exist.
- Cash management operations at subsidiary corporation could be combined with corporate treasury.
- Foreign exchange exposure hedges are not formally approved. Policy requires written documentation from the chief financial officer of all hedge contracts.
- Confirmations sent by counterparties are received directly by those persons who execute foreign exchange hedging transactions.