Audit Program For Internal Audit of Construction Industry
Audit Program For Internal Audit of Construction Industry
Audit Program For Internal Audit of Construction Industry
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4. Billing Cycle
a. Ensure that the payment is made as per the billing cycle. Analyze the reasons for any delay in
payment / payment not made within the due date.
b. Review the clause for release of 60% - 70% adhoc amount against uncertified bill which shall
ease out working capital requirements.
2 INTERNAL AUDIT PROGRAM OF CONSTRUCTION INDUSTRY
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6. Procurement
a. Scope includes: Procurement of material, procurement of labour, procurement of services
b. Review of the Vendor Management process (Calling for quotation, screening of vendors,
selection of vendor, maintaining vendor manual, entering contract with vendor, and renewal
of contract, assigning of vendor code)
c. Control over the material provided by the client
d. Review the process of identification of scrap, documentation of the scrap generated, approval
of the scrap by the respective head
e. Review the process of receipt of material and comparison with the purchase order &
generation of GRN
f. Review of cash purchases at the site
8. Fixed Assets
a. Review the procedure for purchase & maintenance, transfer & disposal of fixed assets.
b. Review of the periodic maintenance of fixed assets with Annual Maintenance contract.
c. Review the entity’s procedure for deciding the asset procurement or hiring.
d. Review whether the date of installation is rightly identified & recorded
e. Coding of fixed assets
f. Analytical procedure for Asset utilization ratio (Total revenue / Total asset) month wise
g. Maintenance cost to the value of fixed assets (Maintenance cost / Cost of asset)
h. Documentation for the transfer of fixed asset (from site to site)
i. Maintenance of fixed asset register and updating of fixed asset register
j. Revenue generation for the disposal of fixed assets
10. Payroll
a. Review the HR Manual to verify the following & compliance of the same:
Availability of leave
Leave encashment
Gratuity
Leave travel allowance
Reimbursements
Availability of perquisites
Salary advances
b. Recovery and remittance of PF, ESI and Professional Tax from employees is made regularly.
c. Check the calculation & remittance of Income Tax
d. Check that provision for gratuity is done correctly
e. Analytical review of Average employee cost per head per project (Total cost of project /
Average number of employees), Employee Turnover ratio, Total employees to outsourced
workers ratio.
f. Reconciliation with respect to changes in the number of employees due to additions,
termination & retirement between various months.
12. Agreement with Collaborators (When two or more hands join hands for execution of project)
a. Review the financial, technical and legal implications of the agreement
b. Perform the reconciliation of the funds remitted, taxes deducted apart from other procedure
performed
c. Does the entity value all gifts in the nature of tools, machinery at proper valuation?