R&D Cash Flow Management by X4apL3

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									Pharmaceutical industry audit program - R&D - Cash flow management

                                                                                                                            Done   Time     Date        Date               Checked
                                               AUDIT PROCEDURES                                                      Ref.    By    Spent   Expected   Finished   Remarks     By:

Application of cash flow management:

i)     Cash flow management is applied to daily operation of the research and development department.

ii)    For the research and development department, nature of cash inflow includes sales of technical know-
       how relating to pharmaceutical products, cash outflow includes staff salaries, rental, and other laboratory
       / office expenses.

iii)   The business unit finance manager is responsible to manage daily cash flow for the research and
       development department.

iv)    On weekly basis, the subsidiary is required to submit weekly cash flow report to corporate office to
       manage group cash flow.

v)     On monthly basis, the subsidiary has to submit monthly and three months cash flow reports to corporate
       office.

vi)    For capital project (including the construction of the new research centre), business unit finance manager
       is responsible to prepare a feasibility study, which includes a projected profit and loss statement and a
       projected cash flow statement.


Objectives:

i)     for the research and development department, to ensure cash flow (long term and short term) is properly
       managed.

ii)    to ensure cash flow reports are reviewed by business unit general manager.

iii)   to ensure cash flow reports are submitted to corporate office on timely basis.




a7730e98-d49a-4c76-8659-7fefc01771f0.xls - Cash flow mgt 8/7/2012 2:57 AM                                                                                                     Page 1
Pharmaceutical industry audit program - R&D - Cash flow management

                                                                                                                        Done   Time     Date        Date               Checked
                                                AUDIT PROCEDURES                                                 Ref.    By    Spent   Expected   Finished   Remarks     By:
Audit Procedures:

1.     Manage short-term cash flow

i)     Discuss with business unit finance manager for problems / issues encountered during manage of short-
       term (i.e. daily / weekly) cash flow.

ii)    Review latest four weeks cash flow report.

iii)   Check cash flow report includes details of cash flow (balance brought forward, receipts (by nature of
       transactions), payments (by transaction type), inter-group fund transfer and balance carried forward) .

iv)    Ensure weekly cash flow report includes four weeks cash flow (one week actual + three weeks forecast),
       comparison of last week actual against projection, and variance analysis.

v)     Discuss with business unit finance manager for reliability of cash flow forecast.

vi)    Ensure that weekly cash flow report is submitted to corporate office on timely basis.


2.     Monthly cash flow reports

i)     Check that the subsidiary has prepared monthly cash flow report (actual versus projection), variance
       analysis and explanation for significant variance.

ii)    Ensure that the monthly cash flow report is reviewed by business unit general manager.

iii)   Ensure that the monthly cash flow report is submitted to corporate office on timely basis.

iv)    Discuss with business unit finance manager for prepare of three months cash flow report (with one month
       actual + two months forecast) on timely basis.

v)     Ensure that the three months cash flow report is reviewed by business unit general manager.

vi)    Check that the three months cash flow report is submitted to corporate office on timely basis.


3.     Manage long-term cash flow




a7730e98-d49a-4c76-8659-7fefc01771f0.xls - Cash flow mgt 8/7/2012 2:57 AM                                                                                                 Page 2
Pharmaceutical industry audit program - R&D - Cash flow management

                                                                                                                            Done   Time     Date        Date               Checked
                                             AUDIT PROCEDURES                                                        Ref.    By    Spent   Expected   Finished   Remarks     By:
i)     Discuss with business unit finance manager for prepare of feasibility study for capital project, especially
       on cash flow projection.

ii)    Review cash flow projection / updates on new research centre.

iii)   Discuss with business unit finance manager for reliability / periodic update of new research centre
       payment schedule / cash flow projection.

iv)    Check with business unit finance manager whether periodic update of new research centre payment
       schedule / cash flow projection is communicated to corporate office on timely basis.




a7730e98-d49a-4c76-8659-7fefc01771f0.xls - Cash flow mgt 8/7/2012 2:57 AM                                                                                                     Page 3

								
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