PPI 5/01 INTERPLANTS AUDIT PROGRAM Interview facility managers regarding their concerns on interplant activity: Follow-up on select recommendations contained in the 3/00 PPI Pricing and Shipping Audit Memo Test System Access Control and Segregation of duties over inventory transactions as part of D&T Y/E applications control review. Review the procedures for shipments between Company facilities: Review procedures for shipments of product into Coshocton from all other sites: Review the procedures for interplant receipts. Review the procedures for interplant receipts with MIS Dept. Review the procedures for interplant receipts with Accounting. Review JDE manuals and screens for data entry and other system controls over interplant shipments Who is responsible for monitoring intransit shipments? What automated tools are used to assist in this monitoring? What inventory adjustments are made as the result of interplant errors? Is there a way to identify errors which have not been adjusted? Is there inventory write-down risk present due to inadequate follow-up of interplant transaction errors? Review system data to determine if there are any shipments greater than one week, which have not been received and entered into the inventory system. Review security procedures and the verification procedures of inventory on shipping and receiving docks. Select a sample of 5 to 10 interplant shipments from the last three months and compare shipping quantities per the packing list and receiving quantities. Obtain explanations for significant fluctuations Document follow-up procedures employed by shipping location when quantity shipped does not agree to quantity shipped. Determine if follow-up for discrepancies is adequate Review the Accounting for intercompany shipments. Test journal entries and account balances to supporting shipping / receiving paperwork Pick a sample of documents used to control intercompany shipments and review for forms layout, completeness of information on the forms, etc. JDE screens and forms Bills of Lading Manifest Packing Slips Document the methodology for transfer prices, differences of Standard costs between locations, PPV for intercompany purchases. Test as deemed necessary. Does transfer pricing cause unnecessary complication? Does it provide the proper incentives? Review Intercompany Receivables and Payables accounting, balances, and test as deemed necessary. Obtain statistics of inter-company shipping errors. What are most common types, causes, corrective action being taken? Appropriate visibility and feedback given for shipping errors? Procedures to count load and ship inventory. Any orders that do not flow through JDE? Any manual orders? Document controls. Review JDE System access and segregation of duties over inventory transactions Evaluate the segregation of duties over inventory adjustments How do we monitor inbound or outbound interplant goods stored on trailers? How do we control carrier pick-ups after 5:00pm? What is the Security Guard’s involvement with interplant shipment control ? Are trailer seals used? Numerically controlled? Who seals trailers? Who has access to unused seals? Is this an effective control or a waste of time?
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