Interlink Communication Pvt (Ltd)

Internal Audit of Multan Display

(01 July, 2022)

Auditor: Mehboob Alam

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 Contents
LIST OF ABBREVIATIONS.............................................................................................................3

1 EXECUTIVE SUMMARY...........................................................................................................4
1.1 Scope of the audit.......................................................................................................................4
1.1. Summary of the findings...........................................................................................................4
1.2. Conclusion..................................................................................................................................6
1.3 Recommendations......................................................................................................................7

2 FINDINGS AND RECOMMENDATIONS................................................................................8

2.1 Stock 2.1 To 2.3 related to inventory.......................................................................................7
2.1 Receivables 2.4 TO 2.07 related to Customers........................................................................8
2.1 Cash 2.08 related to Cash ........................................................................................................9
2.1 Fixed Assets 2.09 related to Cash .........................................................................................10
2.1 Human Resource 2.10 related To HR....................................................................................10

3 ACKNOWLEDGEMENT..........................................................................................................11

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List of abbreviations
Abbreviation Definition
RSM Regional sale manager
ASM Area sale Manager
OB Order booker
HO Head Office
HR Human Resource
IAM Internal audit manager

Note;

All amounts are in Pakistani Rupees.

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1 Executive summary
1.1 Scope of the audit

This audit covers all aspects of the Multan display which is being audited, the activities
which were checked were stock, customer balance, customer feedback, expenses, cash
in hand, fixed Assed and general observation these are the main activities of the Multan
display which were being audited.

Audit objectives and methodology

The audit took place from 30 June, 2022, to 04 July 2022. The audit was carried out at
Multan display

Audit procedures have been performed in regard to the cash and cash equivalents;
advances have given; accounts receivables; inventory; advances received; revenue; cost
of sales and other expenses; salary analysis, human resources; and other related
activities. The audit covers compliance with internal policies and procedures, validation
of the appropriate authorization where required, physical inspection of the company
assets, recalculation of the expense, recognition of transactions, presence of the
supporting documents, treatment of the accounting policies and practices, presence of
the legal documents and interviews with office personnel.

Where controls are absent or not fully effective, the audit report provides
recommendations on appropriate action to be taken. The recommendations mentioned
in this report are not exhaustive.

1.1. Summary of the findings

Main findings in this report are:

Stock-take
 Stock-take was conducted on 01 July 2022, some stocks were short amounted
Rs.11,630/=

 In the previous audit which was conducted on 26 January 2022, the stock was
short, valued at Rs.59,820/=
Rs.24,200 amount was deducted from Multan display’s staff.

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Accounts Receivables.

Local customers were verified by physical visit and some remote customers were
verified by call, there was only one customer named Javed Mobile whose balance was
pending from last 24 December 2020 but this balance is related to Mr.Asim

Cash in hand.

 The difference between physical counting and ZOHO record was short
Rs.267

Fixed Assed.

Confirmed all fixed assets at Multan display, all fixed assets were available
during checking but didn’t matched with the ZOHO.

1.2. Conclusion

Management needs to focus on the areas of operations to bring the system in line with
the internal policies and procedures. The senior and operational staff needs to take a
proactive role to strengthen the financial management and operational systems and
conduct a regular follow up actions.

1.3. Recommendations to improve the branch operation:

Management need to improve all branches operational process, for this purpose the
audit department recommended some policies, if those policies are followed then
following flaws may be reduced up to certain level.

1.3.1 Sharing the market visit plan.

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 All market staff members need to share their daily market visit plan with the
management, this information will improve the management decision process.

1.3.2 Simplify incentives process.

All incentives of RSM, ZSM, ASM, and OB are pending for the last five months,
the management needs to simplify the process in order to clear the pending incentives.

1.3.3 Display Staff

There is only one display manager at Multan display and he is responsible for the
stock there is no assistant at the display. There should be another staff member for his
assistance.

1.3.4 Multan House

At Multan house, there were three staff members who stayed, their names were

ZSM Hamza Farooq

Display Manager Akbar Hussain
Order Booker Muhammad Abu Bakar

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 `
2 Findings and recommendations

2.1
Recommendation Responsible Officer
Ris Management
№ Observation Annex No Completion Date
k Action
1. Stock was not Properly Chances of 01 There should be
managed misuse of proper management
Rs. stock may for stock,
Short (56,495) be high Nominate one staff
Excess 44,865 when stock member for stock
Net short (11,630) is not handling to avoid any
matched misunderstanding.
with
The last audit was
ZOHO.
conducted on 26 January
2022
It affects
Net short in stock was
Financial
valued Rs.44,240
statement.
2. Short Qty Short Qty Value Excess Qty Excess Qty Value Net Short/Excess Net Short/Excess
Rs. Rs. Items Items Value Rs.
Batteries 57 30,940 56 31,745 (1) 805
Chargers 62 12,825 50 10,685 (12) (2140)
Hands free 49 12,730 10 2,435 (39) (10,295)
Power Banks
Memory cards
Total 168 56,495 116 44,865 (52) (11,630)

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 `
Recommendation Responsible Officer
Ris Management
№ Observation Annex No Completion Date
k Action

3. The Major quantity of 01

short items was Hands-
free, their quantity was 39,
and value was Rs.10,295
4. There was only one Bad debt 02 All customers’
customer named Javed balances should be
Mobile, whose balance was cleared.
pending from 24 December
2020 valued at Rs. 193,919
but that balance is related
to Mr.Asim ( RSM
Karachi), discussed with
Mr.Asim,

5. Bahawalpur ASM had a Bad debt 02 All OB, ASM, ZSM,

balance of 84,347, Last and RSM need to
recovery on 18 Oct 2021 clear their balances,
amounted Rs.50,000 and if there are any
issues then inform
management on time.
6. Bahawalpur ASM had Bad debt 02 This is the highest
another balance in their balance if not clear
account valued at the time on time then bad
of audit was Rs. 139,971, debts may occur
at the previous audit that
balance was 278,100,

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 `
Recommendation Responsible Officer
Ris Management
№ Observation Annex No Completion Date
k Action
7. Customers Name Balance Detail of transections Remarks

01 Javed Mobile 193,919 Last recovery on 24 Dec 2020 Still pending

02 Amjad Mobile (Multan) 8,922 Difference created in Dec 2019 Transferred to Bad debts

03 Ashfaq Mobile (Multan) 4,779 Last recovery on 15 Feb 2021, Transferred to Bad debts
amounted Rs.1481
04 Moon Mobile (Multan) 2,500 Difference created in March Transferred to Bad debts
2021
05 Shahid Mobile 2,600 Invoice on 25 May 2021 Transferred to Bad debts
amounted 48,600
Recovery 46,000
Disputed amount 2600
Total 212,720

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 `
Recommendation Responsible Officer
Ris Management
№ Observation Annex No Completion Date
k Action

8. The difference between 03 The cash book

physical cash counting and balance should be
ZOHO record was Rs. 267 match with the
short. ZOHO balance.

9. Fixed assets were not 04

match with the ZOHO
record, the detail is shown
in the reconciliation
report (Annex 03)
10. Incentives for the month of Simplify the
Jan-2022, March-2022, incentives processing
April-2022 May- method.
2022 and Jun-2022 are
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 `
Recommendation Responsible Officer
Ris Management
№ Observation Annex No Completion Date
k Action
pending.

11 There is only one display There should be

manager at Multan display proper staff to avoid
and he is responsible for staff shortage issue
the stock there is no
assistant at the display.
There should be another
staff member for his
assistance.

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 3 Acknowledgement

The auditor would like to thank all the staff for the support they provided during the internal audit.

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