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Scope of Services

The Scope of an Internal Control Review Engagement may include, but is not limited to, the following:  

Entity Level Control

Control Environment

  • Integrity and ethical values
  • Commitment to competence
  • Board of Directors and audit committee
  • Management philosophy and operating style
  • Organization structure
  • Assignment of authority and responsibility
  • Human resources policies, practices and compensation structure
  • Code of conduct 
  • Internal audit

Risk Assessments

  • Risk assessment
  • Changes of operating environment of the client

Monitoring and Control 

  • Management monitoring (including company policies and procedures, monitoring manuals and accounting and management system assessment)
  • Whistle blowing channel and anti-fraud mechanism
  • Procedures for managing regulatory compliance
  • External advisory mechanism

Information and Communication 

  • Strategic information system and communication plan
  • Communication within organization 
  • Communication with outsiders

General Computer Controls

  • Information security control
  • Disaster recovery and business continuity business plan
  • Information systems operations
  • Maintenance of application systems and database
  • Software, hardware and network support
 

Financial Reporting and Disclosure of Internal Control  

Financial organization structure  

  • Accounting policies and procedures 
  • Financing closing
  • Reporting and disclosure
  • Financial budgeting
  • Taxation  
      

Internal Control over Business Processes/Operations

Revenue and Distribution 

  • Customer selection and managing customer information
  • Pricing and sales price adjustment
  • Managing customer credit
  • Handling bad debts
  • Managing and processing sales orders
  • Processing receipts
  • Processing accounts receivable 
  • Sales recognition

Purchase, Expenditure and Accounts Payable

  • Monitoring capital expenditure
  • Supplier/Vendor selection & contract management
  • Managing supplier information
  • Managing and processing purchase orders
  • Goods receive management 
  • Processing accounts payable
  • Processing disbursements/payments

Production 

  • Production budget
  • Quality control
  • Production management
  • Cost control

Inventory

  • Processing and recording inventory movement
  • Inventory system assessment
  • Inventory counting and valuation process 
  • Physical safeguard over inventory

Human Resources & Payroll

  • Recruiting employees
  • Terminating employees
  • Managing staff and payroll records
  • Calculating and disbursing payroll

Fixed Assets

  • Construction in progress management
  • Acquiring fixed assets
  • Depreciating fixed assets
  • Disposing of fixed assets
  • Evaluating fixed assets
  • Managing fixed assets

Cash Management and Treasury

  • Managing capital
  • Managing borrowing
  • Bank account management
  • Physical cash management

Related party transactions 

  • Inter-company transactions
  • Inter-company financings
  • Internal information management and decision making process