Oracle Audit issue for Finance Modules

Finance Internal control

                                                                                                                                                                   Query Sheet – 2                                                     Delegation of Authority

Observations:

Ø  Absence of Delegation of Authority

§  Financial Accounting

§  Inventory

§  Marketing

§  Capex

§  Maintenance and Others

 Query Sheet – 2                                                                                                                                                                    Cash Management

Observation:

We have verified petty cash and cash collection, the details are as follows.

Ø  There is no standard conveyance/travel policy for various categories of employees in written. Hence we are unable to track the same while audit.

Ø  Delay in making payment in bank for collection of cash up to 3 days which leads opportunity loss.

Ø  Cash balance is showing negative balance in the month of Apr 10, May 10, July 10, Oct 10, and Nov 10.

Ø  Instances of checker signature not available on cash voucher.

Ø  Instances of expenses has booked under wrong head.

Query Sheet – 3                                      GL Review – Current Liabilities & Provisions

Observation:

Opening Balance:

Ø  There is an opening balance difference showing of Rs.2781569.88 in the year 2010-11 needs to be carry forward/adjusted

Service Tax:

Ø   Service Tax 07-08 Input Tax [60350010] accounts shows opening debit balance of Rs. 13, 487.88/- and there are no adjustment entries passed since Apr 2008.The same has been classified under duties & taxes and grouped under current liabilities. Since Input service tax is an asset it has to be grouped/ classified under Current Assets.

Ø  Service Tax 07-08 @ 12.36% [60350020] account shows opening credit balance of Rs. 1, 35,414.27/- since Apr 2006 and no adjustment entries is passed. The same has to be write off and necessary adjustment entries need to be passed.

Ø  Cess on Service Tax account [60350400] & TCS Scrap sale account shows opening balance of Rs. 2728.47/- since Apr 2006 & Rs.231.36/- since July 2010 respectively. It appears that the amount is pending for a long period. The same has to be looked into and necessary entries need to be passed.

Tax Deducted at Source:

Ø  TCS collected on VAT Scrap sale which is amended by law.

Ø  TDS on salary has not deducted for first quarter.

Ø  TDS has paid on VAT purchase.

Ø TDS payable on contractors [65450002] - Generally the TDS payable is transferred to TAL Bangalore and the payment is made from Bangalore office. For the month of Feb’10 [Rs. 3487/-], mar’10 [Rs. 10020/-], the transfer entries are not passed hence showing credit balance 15088.25.

Ø TDS payable on rent [65450003] – shows an opening credit balance of Rs.18, 908/- since Apr 2006. There are no adjustment/transfer entries in this account. The same has to be looked into and necessary adjustment entries need to be passed.

Ø TDS Payable account [65450004] – shows an opening balance of Rs. 110547/- (Dr Balance) i.e. excess payment of TDS to be adjusted.

Ø TDS Rent 194/ Non Corporate [65450005] – During the year there is an opening balance of Rs. 69,863.73/- which is carried forward and not adjusted/transferred during the year.

Ø TDS Rent 194/ Corporate [65450006] – During the year  there is an opening balance of Rs. 20, 000/- which is carried forward and not adjusted/transferred during the year.

Ø There have opening balance of surcharge and 2% cess which is carried forward since 2006 and not adjusted/transferred during the year.

Provisions:

Ø  Out standing Liabilities shows an opening credit balance of Rs. 63,639/- and during the year provision has created after making the payment for salary amounting Rs.16813/-for which adjustment entry need to be passed. Refer Annexure-4D

Query Sheet – 4                                                                                Fixed Assets

Observation:

Ø  Fixed Asset register has not been maintained.

Ø  There is one instance where FCS Approval has not available. It is told to us that FCS approval is not required for less than Rs.2000 item.

Ø  Security Seal is not affixed on few of the Fixed Assets invoices.

Ø  PO has not raised for acquisition of few of fixed asset.

Ø  Input credit for VAT has not taken for few of capital goods amounting to Rs.1035.71.

Query Sheet – 5                                                               GL Review – Current Assets

Observation:

Debtors:

Ø  Debtors pending for more than 180 days amounts to Rs. 225507387.90/- and in the case of some debtors the opening balance is pending as on 31.01.2011.

Ø  Some of the Debtors account shows credit balance amounting to Rs 52, 33,254.76. /- and the account shows credit balance from the year beginning. In some of the debtors account it was also observed that further invoice is raised and settled but the credit balance is not adjusted.

Query Sheet – 6                                                          GL Review – Others

Observation:

We have reviewed the GL for the period April’10 to Jan 11 and following are our observations:

Ø  Trade discount is booked under the head of sale ac which is a direct expense.

Ø  Credit card collection ac has not been transferred to Bangalore ac since Dec 10.

Ø  Credit card charge ac has not posted to customer ac  properly.

Ø  Suspense Ac [82050004] is showing credit balance Rs.5, 65,429.09 which are carried forward since 2006 and not adjusted/transferred during the year needs to be write off.