Internal Services Audit Program

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					Contributed 22-5-2002 by ercihcs [] Internal Services Audit Objectives: The allocation of internal services should be performed in agreement with the existing guidelines, be based on the principle of cause and effect, make it possible to accurately calculate the costs to be allocated include all internal services, be appropriate under cost-benefit considerations, observe the "arm's-length principle".

Questions: (1) Have all internal services rendered been allocated? (2) Which services are excluded from the allocation, and why? (3) Who are the internal "customers" for the services rendered? "customers" recorded? Are all

(4) Is a regular control (an actual versus target) comparison of the allocated costs performed? (5) How is it ensured that only real costs are allocated or no double allocation is performed? (6) Are the charges recorded promptly? (7) Are the allocations budgeted and were they co-ordinated in the budget with the "customer" (no double budgeting of costs)? (8) At the end of a period, is a comparison between the budget, the standard costs and the actual cost performed? (9) Does an adjustment take place, if there are essential changes to the basis of calculation? (10) How is the cost ascertainment of the rendered overall performance determined?

(11) Is the overall performance to be allocated exactly distinguished from non-allocatable performances? (12) Is the allocation done at actual cost or standard costs?

(13) Is the overall performance allocated according to its causes(cost driver)? Is the allocation key plausible and does it comprise the cause of the performance consumption accurately and adequately? (14) Is there a combination of several keys when referring to diverse consumption criterions or is the allocation only done according to the main key? (15) (16) Is the calculation of the allocation key correct? Is the principle of materiality (the 80/20 rule) observed?

(17) Is the 'arm's-length principle" observed in case of the allocation to affiliated enterprises? (18) Are there additional charges or credit entries in case of under/over coverage at the end of a period? (19) Are large variations of the allocation avoided (e.g., change of calculations; allocation procedures without changes to the based upon circumstances or costs)? (20) How is the valuation of performances done?

(21) Are the allocated performances valued in accordance with market prices (in case external suppliers exist)? (22) How is the policy in case of large variances between transfer prices and market prices? (23) Are analyses performed and measures taken in the case of persistent under/over coverage?

(24) Are the methods of calculation co-ordinated with the "customer"? Are changes announced early and co-ordinated?

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