This sample report documents an internal audit review of several aspects of a foreign subsidiary, including revenue and expenditure cycles, close the books process, payroll and human resources, cash and treasury, leases, and fixed assets. Objectives include an assessment of the adequacy of the overall financial control environment, assessment of key financial and accounting internal controls, and evaluation of compliance with significant corporate policies and procedures.
The following key observations were noted during the review:
Discount approvals are currently obtained verbally and are not documented on order documentation or the revenue recognition form.
Occasionally, contracts for consulting projects are obtained after work (and revenue recognition) has begun due to client delays in sending contract/order.
A formal process to obtain multiple bids for purchases does not currently exist.
Personnel maintain important files and business data on their local hard drives. There are no procedures in place to save these files to the network.