Summary
Proposal of audit programs for the review and evaluation of the internal control system inherent to the process of purchasing raw material-sugar cane.
objective
Propose audit programs that allow reviewing and evaluating the internal control system inherent in the process of purchasing raw material - sugarcane from producers under a new concept.
The implementation in an entity or organization of an adequate internal control system is an important part because it guarantees the safeguarding of the assets and makes reliable all the results that are essential, the smooth running of any organization or area.
On the other hand, whoever seeks to obtain results of efficiency, effectiveness and economy in the management of their organization, cannot ignore the implementation and application of an internal control system with the necessary requirements to achieve said objectives.
There is no conceivable entity that currently does not have its own control system designed according to its characteristics and functioning properly.
This work was carried out with the purpose of proposing audit procedures that should be used to verify the timely control of the purchases of the raw material sugar cane from the cane producing units, taking into account the changes that have occurred in the payment systems, the new business structure, as well as modifications made to the registers and established models.
Introduction
Internal control must be planned, it will never be a consequence of chance or it will arise spontaneously. Internal control is a well-thought-out web of rules, methods, procedures and coordination measures, which must flow with safety and responsibility, which guarantees the objectives of preserving, with maximum security, the control of resources, the operations noted in the primary documents and registered by accounting. In short, it must help protect resources against fraud, waste and inappropriate use.
The audit program is the plan that relates the content of the work to be carried out during the audit. The more detailed this program, the easier it will be to carry out the audit, especially for inexperienced auditors.
The audit program constitutes an action plan to guide and control the auditor's work. In more or less general terms, it describes the scope of the work and the aspects that must be verified, becoming an orderly method to indicate and control the execution of the audit procedures through which the work is to be carried out.
Taking into account the economic context in which companies develop and the changes to which they are being subjected in the interests of business improvement, the effort of all those people who in one way or another have their hands in control of the companies will be needed. But to achieve this you need an internal control system that does not present cracks. Audit techniques and procedures allow evaluating the effectiveness of internal control, detecting existing problems and facilitating the decision-making process.
1. Objectives of the audit program
The aim of this program is to provide auditors with a work tool that allows them to efficiently meet the following objectives:
- Evaluate the internal control system associated with the purchasing operations of the raw material - sugar cane Verify the reliability of the information that is processed Observe the compatibility between the established models and records Verify that the payment obligations with the producers of the raw material are properly registered Check if the corresponding partial and final settlements have been carried out correctly Obtain competent and relevant evidence that allows identifying whether the internal control procedures associated with the sugarcane adjudication system are working properly throughout the harvest period.
The following are the fundamental aspects, which will serve as a basis for the auditors to evaluate the state of internal control of this activity in the period of raw sugar production.
2. Specific checks to be carried out on the Sugarcane Allocation System
- Check if the Las Romanas Certifications have been drawn up for the weight of the cane purchased by specialized agencies with prior contracting to the service Check that the weigher informs the cane adjudication area, through the weight voucher of the cane to which The ripener was applied to it and to which it was not applied, verifying the bonus and penalties as appropriate Verify the calculation operations reflected in the weight vouchers by means of samples, also verifying that the data of the model coincide with those that are passed to the model “Report of cane received.” Check by sampling that the producers are discounted the tons of cane,To which the percentage of impurity was applied when they are received in the reception centers (determine excess impurities) (10%) Sample the daily reports of the destemming that are sent to the Control Room, those responsible for the determination of foreign matters is the analyst in the collection center, the room only receives the information through daily reports, in order to check the efficiency with which these centers work Check that a payment file has been enabled for each cane producer for the liquidation, in which all the documentation that supports the monetary - commercial relations between the sugar company and the producers is filed. Also verify that the payments made correspond to the nature of the operations carried out by the company. Verify through selective tests,That the documents of receipt of the raw material coincide with the settlements to be paid after making the corresponding discounts established by the legislation in force in the final settlement Review all the documentation related to the payment to the individual producers of the Credit Cooperatives and Services (CCS), as this is where the beneficiaries receive their settlement through individual bank accounts and presumably criminal acts can be committed. Check the coincidence of the data recorded in the Model "Daily Sugarcane Register" with the amount of tons of Gross sugarcane awarded from cooperatives and small farmers and received from other entities Check that the tare of the railroad cars, reflected in the "Register of Taras and Retaras",It corresponds to the one noted in the model «Report of cane carts», in addition it must be taken into account when challenges are made, that new changes are registered in both models, the same procedures must be carried out in the reception centers. In the “Ten-year summary of losses” model, the data related to field weight and batey weight are collected, as well as the losses and / or increases that are determined in the comparison of the weight of the cane in reception centers and weighing in batey, having Take into account that the determined wastage rates correspond to the procedures for their calculation, according to the ZF-38 system Quality of the raw material - cane. Check that the standards reported represent one percent or more of the losses planned by each reception center.Check that the reconciliations have been made between the producer and the buyer before executing the payment or settlement by the latter.
3. Proposal of the audit program
The program must take into account the different areas to be evaluated according to the content defined in them:
1. To evaluate and review the control of documents and records
- Check if the workers have operated or acted on the basis of the current documents Check the time in which the data and information records are kept in the files of the adjudication area as well as know what destination it has once the time has expired Check if all the primary records to be used are available and if they are duly numbered.
2. To evaluate and review human resources
- Verify if the company determined the need for resources to develop and implement, maintain and improve the control system Evaluate whether the level of competence, suitability of the individuals, is adequate and whether current and future needs are guaranteed. have applied the personnel selection and recruitment policies Know if the company has identified the needs for training and development of staff knowledge Evaluate the effectiveness of the training Observe if there are adequate conditions in the workplace, order and hygiene indoors and outdoors Verify the existence of the appropriate means and equipment to achieve the objectives with the expected efficiency (scales, work tools, modules) Verify if the company satisfies the support services (communication,transportation, calibration, material resources) Examine if there are mechanisms that influence people's motivation and if they are aimed at improving quality and if they are linked to stimulation.
3. to evaluate and review the sugarcane contracting process
- Verify if the company has contracts with each sugarcane producer and if they include the specific conditions for the delivery of the raw material Review and evaluate the use of the targeted contract proformas Verify if the concurrent parties in the signing of the contract have Provided the legal mechanism that allows the proper use of the contract Verify if the contract gives specific treatment to be applied in the payment to: the content of foreign matters Delays due to causes attributable to the producer or the industry Burnt cane the time of cut-off and reception at the collection centers, transportation costs and conditions, responsibility for non-compliance, total value and form of payment, place and delivery conditions, means and resources to make delivery.
4. To review and evaluate the accounts payable and purchases subsystem
- Check that the annotations in the records for these operations are made at the time they originate and by the primary documents and that they do not present erasures, amendments and erasures Check that they have established the price check, calculations, documents, and sum when registering the purchase. Check that the registries and submajorities related to these operations are enabled, authorized and square. Check if balance confirmations were made, between customers and suppliers, if there is documentary evidence of them before making the payment. Verify by evidence that the purchases made have the corresponding contract that it is consigned: code, name and surname, address of the parties and characters with which it agrees Quantity of assortment, quality,price or unit rate of the merchandise and amount, and the percentage of loss. Delivery conditions specifying the place, date and means of transport, which will be used for the transfer. The procedures to follow in case of difference in quantity or quality of the goods. Agreed Penalties, bonuses derived from non-compliance or over-compliance.
Of purchases
- Select the period to make the detailed checks and carry out the following work: Compare the invoices made by the suppliers, quantity, type of products and prices and the annotations in the purchase register Verify that the invoices were approved by an official before their payment and duly canceled at the time of being paid Verify the sum of purchase records and the transfer of their totals to the general ledger, review the transaction vouchers or journal entry that account for these amounts and required signatures Examine subsequent payments (at the closing) of accounts payable and determine if they have settled unrecorded liabilities or for amounts different from those shown in the books.
4. Questionnaires to review and evaluate the internal control system applied to the sugarcane adjudication process
1. Audit questionnaire to review and evaluate the application of the control environment component and its standards
- The entity's management pays due attention to the internal control system for the sugarcane adjudication activity. There is an executive organizational structure that guarantees the correct functioning of this activity in the harvest period. There are written regulations and standards related to The management has sought to ensure that the entity monitor and observe ethical values and the regulations of state cadres, as well as the regulations of the workers who participate in the operating cycle of the purchase of raw materials. Caña. There are mechanisms that allow each oriented task to have constant monitoring. Workers know the disciplinary regulations, as well as the other provisions that regulate the conduct to be followed.The mechanisms are established to achieve the desired professional competence of the workers who participate in this activity. The leaders, officials and workers have a level of competence (attitude, suitability) that allows them to understand the importance of the development, implementation and maintenance of controls internal controls, records and appropriate operations Workers sufficiently understand the importance of internal control There is a training plan for the human resources involved in this activity It is reflected in a document the levels of authority, responsibilities and actions that contribute to the achievement of The objectives of the organization. The procedures for selection, induction, recruitment, rotation, promotion and sanction are fulfilled by the Romanian resources that participate in this activity.The Director General's Resolution has been issued approving the position of weighing machine in the reception Centers. The rules and procedures that govern the proper functioning of this activity are updated.
2. Audit questionnaire to review and evaluate the application of the risk management and prevention component and its standards.
- The entity has identified the internal and external risks associated with the fulfillment of this objective of the organization. In the identification process, the factors or sources that most affect them were taken into account, among which are: Lack of experience and knowledge of the personnel participating in the operating cycle Calculation errors in the weight vouchers and established records Receipt of weighing of full cage carts Certification of the Roman in the reception centers and bateyes Tare and challenge of the equipment Errors in the determination of the percentages of foreign materials Differences between field weight-batey weight within the permissible standards Timely transportation of raw material-cane from the reception centers to the batey or industry Intentional changes in the quality of the cane purchased, between they:cane burned by green cane, cane cut by hand for more than 24 hours per cane cut in established time (-24 hours) Loss or misplacement of car cards, weight vouchers Suitability, attitude and traits of nepotism among the personnel who represents the company (reception centers) and the sugarcane producer (computer). The frequency has been estimated as well as quantified the economic impact on the company. The strategy assumed is in correspondence with the objectives set by the organization. There is full control of the operating cycle, which allows predicting or forecasting the outcome of a situation at a given moment. The control objectives of what may occur incorrectly and what is proposed so that it does not occur are established. The control strategy is defined to prevent, detect, prevent, correct the identified risk.The instruments that allow the control strategies to be carried out to reduce risk exposure have been identified.
3. Audit questionnaire to review and evaluate the control activities component and its standards
- The filing of the documents is correct. Performance evaluations are carried out at the end of the harvest period. The internal auditor of the company monitors the proper functioning of the operations cycle and reports the results of the work carried out to the highest management in a timely manner. Through the review of the weight vouchers that: Do not show erasures and erasures The calculations are made correctly The name of the producer appears The type of rod, block, and cutting field is known The consecutive number of the computer and another of the weigher. Penalties for excess impurity in the cane received are applied. The adjudication area is informed of the percentage of impurity detected. The cane that received the ripener is reported. The date, time are recorded in the voucher in which the cane is burned.The draft and railway lines are certified by the specialized and competent bodies. The cane weighers in the lines (field and batey) were duly selected and meet the conditions to occupy the position. The destemming staff were selected and instructed on how must carry out its work. The destemming is carried out to determine the percentage of impurity that the cane brings. The results of the destemming are also used to discount the excess impurity to the cane producers. The percentages are reported to the Control Room of impurity detected daily. The amount of impurity is determined by each reception center and these are reported to the adjudication area so that they are taken into account in the partial settlement. Know through the "Estimated and Average Plan" model,If the cultivators are linked to each reception center according to a previously signed purchase-sale contract The model is issued by the cane production management There is evidence of analysis of the behavior of the programming by dozens The reasons for the differences between the estimate and the actual one obtained. It is known through the model ¨ cart cards¨ if: The squares of the model are correctly filled and their data is rectified. It can be seen if the lower part of the model is filled by the weigher The batey weight is reported to check the variation against the field weight per car allowing to know the percentage of loss The model collects the hours of transportation from the reception center to the batey, to know the compensation to be paid for this concept.Check that the cart cards contain the cart number, the reception center and the date the cart is filled. The following is known through the model »remission of cane carts: Control is maintained by each reception center of the cane carts that are taken and sent to the centrals, as well as the record of field and batey weights. The model is made and issued by the weigher of each reception center. This model serves as a basis for counting the amount of cane in stock on the last day of each month as established Check through the model Daily record of the cane received that: The model is issued by the weigher of each reception center The cane received in each reception center is assumed daily in this model reception.At the end of the day, the weigher issues an additional model summarizing for each producer the tons of cane awarded received on the day. The automated programs of the model ¨ reports of cane cart by cultivators are being applied and this is interrelated with the models of the manual system By means of the Model ¨ Report of heavy cane carts in the batey, check that: The result of the weight of the cane carts in the batey is duly recorded before it is ground.The model supplies the data of the heavy tons necessary to issue the model "daily report of ground cane" and "model remission of cane carts" with a view to preparing the Models "ten-year summary of losses" and "Notice of inspection of Roman numerals «Verify in the Accounting Department if it checks the related cars whose cane was not ground, against the« Jogger Report »Model, leaving evidence of these operations. Check if this model is issued by the head of the trolley tilter of the batey, serving as a counterpart to the weigher Verify if due attention is paid to taking care of considering the tare of the carts at the beginning of the harvest, making a list and determining the tares of those not included Knowing through the Model ¨ Tipper Report¨ the next:If there is effective control over all the railroad cars and motor vehicles tilted during each shift Check if the cars have been weighed twice or if they have not been weighed Check if the model is issued by the person in charge of the tilt shift. of the Model «Daily report of ground cane ¨If it is carried out manually or automatically. Verify if the model collects the information related to ground cane by shift and for each day of accumulation to date. Check if details concerning the form of transportation of the cane, the averages of weights transported by type of vehicle, the burned ground cane and the type of cut. Check if there is evidence of information to the director and especially to the laboratory.Verify if this model is made on the basis of the information contained in the Model »Report of heavy cane carts in batey» Know through the Model ¨ Report of cane movements between companies ». If it is implemented manually or automated. If there is control of the movement of sugarcane between companies If the necessary data are known for the purposes of adjudication as well as the determination of standards, compliance with estimates and averages Check if the information regarding the name detail is offered in the model and password of the growers who send cane directly and who respond to other companies Verify if the previous data are recorded in the weight vouchers, both in manual cutting and mechanized, when it is by purchase-sale in addition to appearing included in the Model »Remission of cane carts».Know through the Model »Ten-year summary of shrinkage», the following: If this model collects data related to field weight and batey weight, as well as the variations determined from the difference between them. Check if this model is supported on the information provided in the Model «Report of heavy cane carts in batey» and the Model «Cart Cards». Check if the data recorded in the model serve as the basis for preparing the Model «Roman inspection notice», in The cases that determine an increase in the planned loss rates. Find out through the Model "Roman Inspection Notice". If the data is completed to achieve the fastest and most efficient attention to the necessary checks and adjustments to the Roman ones.If the variations detected are reported daily through the reception centers according to the review of the Models »Remission of cane carts and 10-year summary of losses». Verify that the employee in charge of completing this model issues the information of the Roman that requires verification and adjustments Verify if the superiors and those responsible for said verification are informed of the Romans with problems Verify if there is control by the sugar factory over the losses due to the indirect influence on production costs. Through the model ¨ Register of tares and challenges. If all equipment is tared before starting the harvest. If all shooting equipment is labeled for identification.There is evidence that the challenges of the agricultural shooting equipment are carried out in a daily and surprising 10%. 100% of the equipment will be challenged on rainy days. Railroad cars are challenged after being repaired. Yes The workshop where these equipment are repaired, they are delivered without first challenging them If the initial tares of the cane shooting equipment are checked daily Check if there are conversion tables for each reception center, there is a copy of this in the area.Know through the Model ¨ Partial cane liquidation. If the program is automated. If the partial liquidation is carried out on the basis of the cane purchase-sale contract, in the payment method section. If all the cane is liquidated according to the approved price per ton.If the settlement is made on the basis of prior agreements between the sugar company and the producers and is communicated to the economy area by the company's management. Find out through the model "Final sugarcane settlement to producers". If it is automated Complementation of the model If there is control over compliance with the sugarcane estimate and evaluate its real behavior If there is any duplication in the sugarcane settlement Verify the requirements of some compensatory measures of the MFP Check if decennial reconciliations are carried out between producer and buyer, as an essential element for settlement.If the complementation of the model is automated. If there is control over compliance with the sugarcane estimate and evaluate its real behavior. If there is any duplication in the sugarcane settlement. Verify the requirements of some compensatory measures of the MFP. Check if they are carried out. ten-year conciliations between producer and buyer, as an essential element for settlement.If the complementation of the model is automated. If there is control over compliance with the sugarcane estimate and evaluate its real behavior. If there is any duplication in the sugarcane settlement. Verify the requirements of some compensatory measures of the MFP. Check if they are carried out. ten-year conciliations between producer and buyer, as an essential element for settlement.
4. Audit questionnaire to review and evaluate the Information and communication component and its standards
- The information is available in a timely manner, making it possible to provide a timely solution to any problem arising during the harvest period. The information that is issued allows officials and workers to comply with their obligations and responsibilities. There are mechanisms that provide information to companies. The right people, with sufficient detail and at the right time. The information system is designed taking into account the strategy and operations program of the Company for this task. There are communication channels for all the organizational assets that participate in this The workers understand how their tasks affect the performance of the entity or affect other workers The workers know the objectives of their activity and how they contribute to its achievement The meetings,contacts or moments of exchange, where workers receive information and have the possibility to express their opinions.
5. Proposal of the audit questionnaire to review and evaluate the supervision and monitoring component and its standards
- There is a system of supervision and monitoring of the internal control associated with the sugarcane awarding process, in the harvest period. The Internal Control Committee, within its objectives, includes the vigilance of the proper functioning of the internal control system and its continuous improvement. Managers periodically evaluate the effectiveness of the existing internal control for this activity. A Special Audit is included in the internal audit plan for the issue related to the award of sugar cane to producers. Deficiencies detected are reported to the highest management The effectiveness of the activities carried out by the Internal Auditor is evaluated.
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