a) The internal auditor of a company with multiple 'strategic business units (SBUS)' noticed the following:...

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a) The internal auditor of a company with multiple 'strategic business units (SBUS)' noticed the following: i. Same components of material are purchased by different units at different prices. ii. Marketing personnel have been offering discounts/price reductions neither over catalogue/quoted prices beyond the authorized quantum/range without the prior approval of managing director nor were ratifications obtained subsequently. iii. Some of the items of work relating to the manufacture of parts/sub-systems are sub-contracted to outside parties though there is capability and spare capacity available in the other sister SBUS within the company on the plea that it is cheaper to get it done from outside. Draft the report of the internal auditor covering the above observations. Make assumptions, if necessary. (20 Marks) a) The internal auditor of a company with multiple 'strategic business units (SBUS)' noticed the following: i. Same components of material are purchased by different units at different prices. ii. Marketing personnel have been offering discounts/price reductions neither over catalogue/quoted prices beyond the authorized quantum/range without the prior approval of managing director nor were ratifications obtained subsequently. iii. Some of the items of work relating to the manufacture of parts/sub-systems are sub-contracted to outside parties though there is capability and spare capacity available in the other sister SBUS within the company on the plea that it is cheaper to get it done from outside. Draft the report of the internal auditor covering the above observations. Make assumptions, if necessary. (20 Marks)

Answer rating: 100% (QA)

Date 28122010 The Managing Director XYZ Limited Islamabad Sir Sub Special Report of Internal Audit In the course of conducting the internal audit for the last quarter I have made certain observations ... View the full answer