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
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
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
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
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
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
Obtain statistics of inter-company shipping errors. What are most common types, causes,
corrective action being taken? Appropriate visibility and feedback given for shipping
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
Is this an effective control or a waste of time?