proposal risk based internal audit 2013

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1 Proposal to provide Risk based internal audit and legal compliance services Riskpro India

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I am writing to you to introduce my company to your organisation and also see if there is a need for risk based internal audit which can be outsourced to Riskpro India Riskpro-India is a specialized Risk Management Consulting firm based in Mumbai, India and with offices at Delhi and Bangalore. Our Internal Audit includes • Risk assessment and development of risk based audit plan • Full scope audits (across various sourcing options) • Assessing the effectiveness of risk management & internal audit • Authenticating monitoring functions and governance practices • Appropriately assessing the security, integrity, availability and reliability of critical information – financial & operational • Audit of compliance with laws and regulations. Helping companies achieve their stated objectives through an enhanced understanding and management of risks How we can help Our internal audit services enhance processes and controls in our clients’ businesses by focusing on key value drivers. Through multiple sourcing options (co-source, out-source, staff augmentation) and flexible delivery platforms (onsite, offshore, combination) we offer our clients cross-spectrum internal audit services that are tailored to their specific requirements. Brief description of our firm is mentioned below:- RISKPRO INDIA • Riskpro is India’s first national practice dedicated to risk management services and training, corporate governance, and global regulatory compliances. • Risk can be defined as a prospect of loss or reduced gain that can adversely affect the achievement of an organisation’s objectives. • When greed overtakes need, it spells trouble. Manifested as ‘bankruptcy’ in much of the developed world and ‘corruption’ closer to home, greed has clearly disrupted some major industrialised economies and enhanced the risks of doing business • In today’s world, risks are not few. The reason companies so often fail to systematically manage their key risks is rooted in the way they define the risks they face. Risks are manageable and the answer to untapped business opportunities that lie dormant waiting for risk factors to turn favourable • Riskpro was founded in 2009 with offices in Mumbai, Delhi, and Bangalore and it has already added eight member firms in Ahmedabad, Agra, Chennai, Gurgaon, Hyderabad, Jaipur, Ludhiana, and Pune. All our offices and member firms are well equipped and staffed with qualified professionals viz. CA, CWA, CS, CPA, CIA, CISA, CFA, and MBA • Riskpro’s founders are qualified risk management specialists with extensive work experience in India, Middle East, Europe and USA in several industries and financial institutions • Riskpro aims to be the preferred service provider for large and medium enterprises on risk protection, corporate governance, and global regulatory issues; delivering state-of-the-art quality and timely services at viable rates

TRANSCRIPT

Page 1: Proposal risk based internal audit 2013

1

Proposal to provide Risk based internal audit

and legal compliance services

Riskpro India

Page 2: Proposal risk based internal audit 2013

2

Make Decisions……

Take Risks…….......

Your partner in

Risk Management /

compliance / audit

Experience Success!

Page 3: Proposal risk based internal audit 2013

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Background - Who is Riskpro… Why us?

ABOUT US

Riskpro is an organisation of member firms around India devoted to client service excellence. Member firms offer wide range of services in the field of risk management.

Currently it has offices in three major cities Mumbai, Delhi and Bangalore and alliances in other cities.

Managed by experienced professionals with experiences spanning various industries.

MISSION

Provide integrated risk management

consulting services to mid-large sized corporate /financial institutions in India

Be the preferred service provider for complete Governance, Risk and Compliance (GRC) solutions.

VALUE PROPOSITION

You get quality advisory, normally delivered by large consulting firms, at fee levels charged by independent & small firms

High quality deliverables

Multi-skilled & multi-disciplined organisation.

Timely completion of any task

Affordable alternative to large firms

DIFFERENTIATORS

Risk Management is our main focus

Over 200 years of cumulative experience

Hybrid Delivery model

Ability to take on large and complex projects due to delivery capabilities

We Hold hands, not shake hands.

Page 4: Proposal risk based internal audit 2013

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Riskpro’s Network Presence

New Delhi

Mumbai

Bangalore

Ahmedabad

Pune

Agra

Salem

Kolkata

Hyderabad

Page 5: Proposal risk based internal audit 2013

5

Your requirements

● You require a firm with not only demonstrable skills and experience in

your sector, but also the ability to deliver seamless compliance and

business support services that match your development plans;

● You also wish to work with a firm that is personable and easy to deal

with. While we operate in an environment that demands honed

technical ability and a degree of formality, arising from the

professional standards we observe, we regard ourselves as a flexible

and responsive team that has client relationships at its heart; and

● You, also wish to ensure that your auditors, consultants and advisers

are appropriate for tomorrow's environment.

Page 6: Proposal risk based internal audit 2013

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Our commitment

We commit to you that we will:

● dedicate our best resources to ensure that your needs are met;

● provide an effective, efficient and smart consulting services;

● adhere to timeliness and reporting deadlines;

● provide constructive suggestions on improving processes and

controls;

● work closely with your management in a co-operative environment;

and

● keep you regularly updated on significant changes in regulatory,

accounting and other compliance sectors.

Page 7: Proposal risk based internal audit 2013

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About Mehrotra and Mehrotra, Chartered Accountants

Mehrotra & Mehrotra is a firm of Chartered Accountants based at New Delhi.

It is also having offices at Jaipur and Kanpur. The firm was established in

the year 1962 by Mr. M.P. Mehrotra.

Our team of professionals including Chartered Accountants, Certified

Internal Auditors, Lawyers, Solicitors, Engineers and MBA's are engaged in

developing and refining new processes and methodologies to offer

excellent quality services to our esteemed clients.

The firm has provided a wide gamut of services like Accounting Services,

Auditing Services, Taxation Services to the clients both within and outside

India.

Page 8: Proposal risk based internal audit 2013

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Our differentiating factors

● Adding value to the client and protecting their business is paramount and our

logo symbolizes that bond of protection

● Unique combination of International, senior, hands on industry experience,

across all areas of the requirement.

● Mature and deep domain expertise, along with current involvement in strategic

business growth activity.

● Strengths in relation to Business Model and Objectives - Track Record of

Ethical Practice

● Strengths in relation to Implementation Plan - Proven Success in taking

businesses from Vision to Reality through tactical Implementation across all

aspects of the plan

● Strengths in relation to Requirements- Track Record in geographical,

Professional and Business areas.

● Value for money

● Building enduring relationships with all our clients as a trusted business

partner

Page 10: Proposal risk based internal audit 2013

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Team Experiences Our Experiences

Any trademarks or logos used throughout this presentation are the property of their

respective owners

Our team members have worked at world class Companies

Page 11: Proposal risk based internal audit 2013

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Quality assured

We place great emphasis on quality control and quality management.

Our quality process Our Quality Process is designed to provide a quality culture, to analyze the processes used to hire, train and retain staff, to develop and deliver services to our clients and to administer our own business.

Skills and competence Personnel in the firm adhere to the standards of independence, integrity, objectivity and confidentiality. The firm is staffed by personnel who have attained, and who maintain, the skills and competence required to enable them to fulfill their responsibilities. To assist in maintaining these skills the firm has procedures for: training of staff at all levels, through both formal

courses and on-the-job experience; continuing professional education; assigning work to personnel who have the degree

of technical training and proficiency required in the circumstances; and

evaluating the performance of staff and counseling staff as to their progress and career opportunities.

`

CONTINUOUS IMPROVEMENT

Leadership and Quality

Culture

Information Analysis and

Planning

Human Resource Processes

External Service

Processes

Business Processes

Service Delivery

Measure Client

Satisfaction and Business

Results

Direction and supervision The firm provides for appropriate direction and supervision at all levels, together with appropriate consultation procedures, to give reasonable assurance that the work performed meets the highest standards. We:

employ and retain only those persons with the intelligence, education, character and diligence necessary to assume professional responsibility;

assign engagement responsibility to only those persons sufficiently trained and supervised to discharge those responsibilities;

not accept or continue a client relationship in circumstances incompatible with the firm’s integrity;

adopt promptly policies necessary to realise the objective of professional standards and applicable regulatory requirements;

maintain policies to ensure that the firm and its professionals are free of conflicts of interest and that professional excellence is achieved;

not tolerate any act that can damage the firm’s credibility.

Confidentiality We are well aware of the importance that you place on confidentiality requirements and we have a proven record of maintaining a strict code of confidentiality. Our firm policy requires that affairs of clients be confidentially kept at all times.

Page 12: Proposal risk based internal audit 2013

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Clear and continuous communication

At Riskpro India, open and honest communication is a Core Value. Our experience

leaves us in no doubt that a successful relationship is based on trust and candid,

proactive communication.

Regular and open two-way communication is fundamental to all aspects of our service

to you. As an initial priority, we will agree with you an annual Communication Plan for

all our key meetings. This will help ensure there are formal and informal opportunities

for all key stakeholders to be kept informed of the issues that matter, and that there will

be “no surprises”.

Key objectives Meeting/stakeholders

Present annual audit plan

Report key findings

Updated assessments of key risks, including emerging risks

Discuss new regulatory and corporate governance requirements

Bi-annual meetings (or as requested) with the

Board / Audit Committee

Discuss strategy

Discuss operational matters and performance

Raise and consider emerging issues

Quarterly meetings with the Chief Executive

Officer

Discuss operational matters and financial performance

Discuss implications of changes to the reporting and internal control framework

Regular meetings with Head of Financial

Control

Discuss operational and business matters Meetings with operational management

Page 13: Proposal risk based internal audit 2013

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Our fees

Our aim is to build a long-term relationship with you. We believe that the essence of

building such a relationship is the quality of the service and expertise that we provide.

We also believe that the combination of our international expertise with local market

knowledge enables us to propose a fee that provides value to you.

Accordingly our fee will be structured as a fixed fee which would be payable in two

equal instalments, on commencement of the engagement and on submission of the

draft report.

No Particulars Per Diem Rate - INR

1 Staff Category

Partner 8,000 - 30,000

Manager 4,000 - 6,000

Staff Accountant ~ Rs 2,000

2 Expenses

Travel and Conveyance

Board and Lodging

Actual Cost

ex Delhi, and ex Mumbai

Page 14: Proposal risk based internal audit 2013

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RESUMES – Our team

Co-Founder - Riskpro

CA, CPA, MBA-Finance (USA), FRM (GARP)

Over 10 years international experience – 6 years in Bahrain and 4 years USA

15 years exp in risk management consulting and internal audits, Specialization in Operational Risk, Basel II, Sox and Control design

Worked for Ernst & Young (Bahrain), Arab Investment Company (Bahrain), Navigant Consulting(USA), Kotak Mahindra Bank (India) and Credit Suisse(India)

Sox Compliance project for Fannie Mae, USA ( $900+ Billion Mortgage Company)

Ma

no

j Ja

in

Co- Founder - Riskpro

CA (India), MBA (Netherlands), CIA (USA)

Over 15 years of extensive internal and external audit experience in India and abroad.

Worked with KPMG United Arab Emirates, PKF South Africa, Ernst and Young Kuwait, Deloitte Netherlands and KPMG India.

Worked with clients in a wide variety of industries and countries including trading, retail and consumer goods, NGO, manufacturing and banking and finance. Major clients include banks, investment companies, manufacturing organizations, aviation etc.

Ra

hu

l B

ha

n

Credentials

Page 15: Proposal risk based internal audit 2013

15

RESUMES - Our team

Co-Founder - Riskpro

PGD (Electrical & Electronics & Computer Programming)

30 years of experience in Information & Communications Technology (ICT) Solutions for Retail, Garments, Manufacturing, Services Industries.

Has created Companies, Divisions, Products, Brands, Teams & Markets.

Consulting in Business, Technology, Marketing & Sales & Strategic Planning.

Advisory, Training, Workshops & Implementation in Systems Thinking, Systems Modeling & Balanced Scorecard

Worked with TIFR, Mahindra, Ambience, Communico-Graphique & Ionidea Inc, USA,

Ca

sp

er A

bra

ha

m

Credentials

Senior Vice President – Risk Management (Fraud Risk, BFSI)

MBA, PDFM, NSE-NCFM, PMP, CSSGB,Trained ISO 9001:2000 I.A

Professional with 17 years of rich experience into diverse Consumer finance/ Lending operations ,Risk Management,BPMS, Consumer Banking, NBFC, Management Consulting & Housing finance in BFSI industry having successfully led key business strategic engagements across multi-product environment in APAC, Australia and US regions.

Worked with GE, ABN AMRO Bank, Citigroup, Accenture, Deutsche Postbank

Highly skilled and expert Trainer in Fraud Risk areas across Credit, Corporate Risk management.

Specializes in Fraud Control, Compliance QA ,ERM and Regulatory governance.

He

ma

nt S

eig

ell

Page 16: Proposal risk based internal audit 2013

16

RESUMES - Our team

Head – Taxation Risk Advisory

B.Com, FCA

Senior Partner with 48 year old Delhi based Chartered Accountant firm, Mehrotra and Mehrotra

Over 19 years of experience in the field of Audit, Taxation, Company law matters.

Major clients served are NTPC, BHEL, Bank of India, PNB, Airport Authority of India etc.

Ra

jesh

Jh

ala

ni

Credentials

President – Banking & Financial Services

A senior researcher in Applied Mathematics leading to Ph.D after MSc (Mathematics), CWA, CAIIB

Combined experience of 25+ years in corporate banking, risk management, international trade finance, development of risk rating models, project finance, credit monitoring and NPA management

Since 2006 conducting open / in-house training on the above domains to all Top public/ new and old private sector banks, top MNC banks (India and abroad), leading NBFCs and corporates in manufacturing and financial services space; Worked on IFC (World Bank) funded projects for MSMEs in India and abroad

Worked for Bank of Baroda and ICICI Bank – bestowed Top Performer Award continuously two years during his tenure; widely travelled abroad for business relations, seminars, offering training, investor meetings, NYSE listing and for processes involving establishment of representative Office in USA

Siv

ara

ma

krish

na

n

Page 17: Proposal risk based internal audit 2013

17

Executive Vice President – Risk Management ( Banking & Financial Services)

A hands-on banking professional {BSc (Mathematics), CAIIB} with considerable domestic and international experience

An aggregate experience of 24+ years across industry, mainly BFSI in several functional areas including Retail and Commercial Banking, Corporate Lending, team member of the Business Process Re-Engineering project (BPR); conceptualizing and setting up shared services centres for centralized operations for the Bank in India.

Management through ERM framework overseeing all key areas of the business through various Operational Risk tools like KRI / RCSA matrices. Managing of major project implementation of Basel II and Compliance risk framework

Directing, reviewing and advising Board of Directors on various compliance issues and representing the bank to the Central Bank regulatory offices.

Worked for ANZ Grindlays Bank, Standard Chartered, Bahraini Saudi Bank and Dubai Holdings ( subsidiary)

Ka

sh

i B

an

erje

e

RESUMES - Our team Credentials

Consultant – Information Security & IT Governance

LLB, CA, CISA, CWA, CS, CFE and others

Over 15 years of experience in the field of Audit, Taxation, Investigations.

Specializing in the field of Systems Audit, Cybrex Audit, Computer Crime Investigations, IS Forensics

International Committee Member of Governmental and Regulatory Agencies Board and Academic Relations Committee of ISACA, USA

An

jay A

ga

rwa

l

Page 18: Proposal risk based internal audit 2013

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RESUMES - Our team Credentials P

ha

nin

dra

Pra

ka

sh

Vice President – Riskpro India

FCA [India], ACMA [India], CFE [USA], CertIFRS [UK]

Over 16 years of extensive consulting experience which includes financial & systems audit, process transformation, implementation of internal controls, SOX compliance, fraud audits & due diligence, US-India taxation

Engaged in consulting roles as trusted advisor to finance, internal audit and information technology executives of multiple Fortune 1000 companies with project sites in US, Canada, Europe & Asia

Worked with E&Y and Deloitte Consulting in USA

Some of the major clients served internationally are GE Capital, UBS, McKesson, Eaton, Imation, Albertsons,

EVP and Head – Telecom Risk Advisory

M.Tech, IIT Kharagpur, India; IES; Doctoral study, research and teaching in Linkpoing University/Sweden; Lead Auditor (BVQI).

Over 30 years on International experience in networks and mobile Handsets from top global companies /institutes like ISRO, Ericsson, Nokia, Nokia Siemens Networks and based mostly in its head quarter locations in India, EU, USA.

Expertise: Setting up capability, behaviour, culture in turning Risk, Quality, Innovation for competitive advantage, customer delight and sustainability; key skill sets are Engagement, Handholding, Coaching, Mentoring and lot of best practices, benchmarking/standards like CMMI, TL9000, Six Sigma, ISO, SAS 70 etc.

Aso

k S

it

Page 19: Proposal risk based internal audit 2013

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Executive Vice President – Risk Management ( Banking & Financial Services)

Professional Risk Manager with considerable domestic and international experience

An aggregate experience of 30 + years across industry, mainly Banking in several functional areas including Wholesale Credit Risk, Operational Risk, Trade Finance , Retail Banking and Islamic Financial Services.

Track record of setting up of excellence in the set-up, and management of credit and operational risk, compliance and credit administration functions in retail, commercial , Islamic Banking and offshore banking entities in the Middle East.

Key strength includes Corporate Credits, Risk Management in IT, implementation of Risk Management module in core banking Bank’s Policies, procedures, Country Risk. Played an active role in 3 core banking software implementations

Worked for a Private Sector Bank in India, ABN AMRO Bank, Bahrain, Bank Muscat Bahrain and BMI Bank Bahrain as AGM Risk Management.

Vija

ya

n G

ovin

da

raja

n

RESUMES - Our team Credentials

Page 20: Proposal risk based internal audit 2013

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Specialist Risk Consultant – Business Continuity

Founder and 15-year Chairman of Survive, the first international user group for Business Continuity professionals

Founding director and first Fellow of the Business Continuity Institute

Over 25 years international consulting expertise in Risk, Crisis, Emergency, Incident, and Business Continuity and ICT Disaster Recovery Management

Multi-sector experience including Banking, Insurance, Finance, Oil, Gas, Energy, Manufacturing, Retail, Hi-Tech & Telecom

Western Press Award for services to business, 1994; BCI/CIR nomination for lifetime achievement in BC, 1999, London; inducted into BC Hall of Fame by CPM magazine, 2004, Washington DC.

Andre

w H

iles

RESUMES - PARTNERSHIPS

Specialist Risk Consultant – Enterprise Risk Management

Highly skilled risk and insurance professional with 25 years of experience designing, developing and implementing large, global corporate risk management programs for Fortune 500 firms.

Principal Consultant and Founder - Excellence in Risk Management, LLC. (Texas, USA) Co-founder and EVP, Professional Services, rPM3 Solutions, LLC (Maryland, USA).

Past experiences include Head of Global Risk Management for USAA, PepsiCo/Tricon Global and American National Red Cross

Additional risk and insurance experience at Verizon Corp,. Marsh USA and Liberty Mutual Insurance Co.

2004 Risk Manager of the Year – 2007 recipient of the Alexander Hamilton Award for “Excellence in ERM” (at USAA) – former President, Risk and Insurance Management Society, Inc.

Chris E

. M

andel

Page 21: Proposal risk based internal audit 2013

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RESUMES - Advisors

Founder partner of Mehrotra and Mehrotra, a 48 year old CA firm in India

Bcom, FCA, LLB

Over 48 years of experience in audits, taxation, legal matters, loan syndication etc.

Trustee of Cochin Port Trust, Member of Task Force for MOUs, Ministry of Heavy

Industries & Public Enterprises, Govt. of India, Ex- Member of Central Board of

Trustees, Employees’ Provident Fund Organisation (EPFO), Ministry of Labour,

Govt. of India, New Delhi.

Ex - Director, Canara Bank Mr.

MP

Me

hro

tra

Practicing chartered accountant in Delhi

CA, ICWA

Over 35 years of professional experience.

Trustee, Kargil Shaheed Smarak Samiti

Hon. Treasurer, World Academy of Spiritual Sciences (WASS).

Panel Arbitrator, International Centre for Alternative Dispute Resolution

Arbitrator, Cement Corporation of India

Arbitrator, Bombay Stock Exchange Limited

Arbitrator, Central Depository Services (India) Limited

Arbitrator’s Panel of Indian Council of Arbitration

Mr.

PK

Gu

pta

Credentials

Page 22: Proposal risk based internal audit 2013

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Key Contacts

Corporate Mumbai Delhi Bangalore

Riskpro India

Ventures (P) Limited

[email protected]

www.riskpro.in

C 561, Defence colony

New Delhi 110024

Manoj Jain Director

M- 98337 67114

[email protected]

Sivaramakrishnan President – Banking & FS

M- 98690 19311

[email protected]

Rahul Bhan Director

M- 99680 05042

[email protected]

Hemant Seigell SVP – Risk Management

M- 99536 97905

[email protected]

Casper Abraham Director

M- 98450 61870

[email protected]

Vijayan Govindarajan EVP – Risk Management

M- 99166 63652 [email protected]

Ahmedabad Pune Kolkata Gurgaon

Maulik Manakiwala Associate Firm

M – 98256 40046

Gourav Ladha Sap Risk Advisory

M- 97129 52955

M.L. Jain Principal – Strategy Risk

M- 98220 11987

[email protected]

Kashi Banerjee EVP – Risk Management

M- 98304 75375

[email protected]

Nilesh Bhatia Head – Human Capital Mgt.

M- 98182 93434

[email protected]

Salem Ghaziabad Agra Hyderabad

Chandrasekeran Recruitment franchisee

M – 94435 99132

R Gupta Head – Insurance Risk

M- 98101 07387

Alok Kumar Agarwal Associate Firm

M- 99971 65253

Phanindra Prakash Member Firm

M- 95500 61616

Copyright- © 2012 Riskpro ,India .All rights reserved.

Page 23: Proposal risk based internal audit 2013

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Key Contacts (Continued)

Corporate Bangalore Gurgaon

Riskpro India

Ventures (P) Limited

[email protected]

www.riskpro.in

C 561, Defence colony

New Delhi 110024

Ravikiran Bhandari

VP – IT Risk Advisory

M- 99001 69562

[email protected]

Asok Sit

EVP, Head – Telecom Risk Advisory

M- 98105 03463

[email protected]

Copyright- © 2012 Riskpro ,India .All rights reserved.

Page 24: Proposal risk based internal audit 2013

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ANNEXURE I - Our Audit Methodology

Page 25: Proposal risk based internal audit 2013

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Our audit methodology - Risk Based Internal Audit How we Do

Transaction

Audit

Control

Reviews

Process

Reviews

Risk

Assessment

Fraud

Mitigation

Enterprise Risk

Assessment

Increasing Enterprise Risk Focus

Need

of

Org

an

izati

on

s

Internal Auditing helps an organization

accomplish its objectives by bringing a

systematic, disciplined approach to evaluate

and improve the effectiveness of risk

management, control and governance

processes. Source: The Institute of Internal Auditors 1999 (IIA)

Benefits of Risk based Audit

• Traditional audit view value added

techniques

•Risk profile of Businesses

•Internal Controls & Ops Risk reviews

•Cost reductions recommendations

•Review of Fraud Risk Controls

Page 26: Proposal risk based internal audit 2013

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Our audit methodology

Our audit methodology is risk-based and systematic which focuses on the organizational

objectives and any impediment to achieving those objectives. We recognise fully the need to

provide assurance on your business operations. Equally, we recognise the importance of

managing compliance issues, particularly in today’s evolving regulatory environment.

The key benefits of our audit approach are:

●Risk-based, & systematic approach;

●Focus on areas considered as potentially & most likely to

lead to material errors in financial statements;

●Our audit control procedures are based on project planning

techniques, including the use of automated processes and

document templates, and the agreement of objectives,

timetables, responsibilities and careful resource planning;

●The focus of our reports are to generate constructive and

value added advice; and

●Identifies performance improvement and cost reduction

opportunities.

Audit Strategy / Planning

Risk Assessment

Understanding of Business

Fieldwork

Dealing with critical issues

Reporting

Page 27: Proposal risk based internal audit 2013

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Our audit methodology (cont..)

UNDERSTANDING THE BUSINESS

Our top-down risk-based approach ensures that the audit focus is on the issues that

are of greatest importance to you and that we are in the most appropriate position to

respond to them. Our audit starts with a detailed understanding of your industry and

business.

Our approach is based on a top-down examination of the key drivers of your business.

The output is a balanced picture of how the company interacts with customers and

external industry forces. We consider the audit implications of this analysis and use it

to identify significant audit risks.

We use industry specific business models to gain information on:

• industry background including major players, regulatory changes and trends,

• risks and drivers,

• geographic issues,

• descriptions of business processes,

• benchmarks and best practice and

• audit risks.

Page 28: Proposal risk based internal audit 2013

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Our audit methodology (cont..)

RISK ASSESSMENT

In order to run your business, you develop processes to manage the factors that drive

performance and help control internal and external risks that could prevent you from meeting

your objectives. We focus on those processes where significant risks have been identified and

discuss with management its perception of how these risks are controlled. This phase of our

work enables us to obtain information on the processes supporting the achievement of the

company’s goals.

AUDIT STRATEGY AND PLANNING

Based on the understanding of business and risk assessment we devise the audit strategy. We

then develop detailed audit programs to test the transactions, processes and balances.

AUDIT FIELD WORK

The audit test work flows from strategic planning and risk assessment. The key element is to

review and test the high level controls embedded in your processes, as significant weaknesses

in your key processes could cost, both in terms of financial impact and reputational damage. We

also carry out necessary substantive audit procedures.

DEALING WITH CRITICAL ISSUES AND REPORTING

We identify and discuss all critical issues with management. We then determine whether the

Company’s financial statements and related disclosures meet our expectations.

We provide the audit report, management letter and any other deliverables and formally present

these to the Audit Committee / Board.

Page 29: Proposal risk based internal audit 2013

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Our audit methodology (cont..)

IT AUDIT PROCESSES AND METHODOLOGY

We see IT as an enabler of the operational and financial processes and we

incorporate IT audit professionals into our audit to facilitate the identification and

testing of IT controls.

We use our focused IT audit methodologies and tools as part of our core audit

process to evaluate and test whether the Company’s information systems are

configured for data integrity, are secure and are effectively managing the business

needs. We work with key business and IT management to identify aspects of IT

that pose the highest risk to the Company. We then conduct a systematic, detailed

review of those areas in which we:

• identify appropriate IT control objectives that map to key business

processes;

• identify relevant IT policies and procedures and/or industry IT standards;

and

• evaluate the design of controls and test whether they are in place and

operating effectively.

Page 30: Proposal risk based internal audit 2013

30

Our audit methodology (cont..)

We use the following types of IT methodologies:

Continuity management

System capacity and availability

Back up and recovery

Data storage

Project risk assessment

Quality Assurance

Project management methodology

Programme management

processes

Process Documentation

Control Risk Analysis

Control Design & Implementation

Network penetration testing

Information security assessment

Enterprise security architecture and

integration

Ongoing monitoring

IT AUDIT METHODOLOGIES

Page 31: Proposal risk based internal audit 2013

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Our audit methodology (cont..)

INTELLIGENT USE OF TECHNOLOGY

Technology is only one component of an integrated approach that combines

methodology, knowledge and technology into our tailored service to you.

We deliver our external audit services using a fully automated audit software. This

software is designed specifically to integrate knowledge management into the audit

process. Technology can never be a substitute for face-to-face communications and

we continue to rely on meetings with management to identify, resolve and

communicate issues.

Knowledge

MethodologyTechnology

Knowledge

MethodologyTechnology

Page 32: Proposal risk based internal audit 2013

32

Strategic questions with regard to the engagement

• Have you had any personnel changes that have impacted your area?

• Have you had any computer system/computer software changes and are any projected

for your area?

• Has your area experienced any losses in recent years? If so, please describe.

• Do any third parties such as the external auditors or regulatory auditors review your

area? If so, please provide the report.

• Do you have any regulatory reporting requirements? Describe the frequency and

sensitivity of the filing.

• How much do you rely on manual processing in lieu of computer processing?

• What areas have you experienced poor performance?

• Has the volume of transactions processed in your area changed?

• What type of impact could your unit have on the Association’s reputation, if you did not

meet your mission?

• Do you have any Program performance issues that you want reviewed?

Page 33: Proposal risk based internal audit 2013

33

ANNEXURE II - Legal Compliance

Page 34: Proposal risk based internal audit 2013

34

Legal compliance

Stage 1 – CAC

Preparation of Compliance Audit Checklist (CAC) covering all relevant laws

applicable to the target unit.

Stage 2 - Visit to location

Verification of relevant records and documents available.

Compilation of draft report based upon findings and observations of the audit

team

Review meeting with the unit head / work directors to discussion on the

finding of audit.

Stage 3 – Report

Submission of detailed Non Compliance (NC) report to the company (Board

of Directors or Compliance Head)

Follow up with the unit to verify action taken

Page 35: Proposal risk based internal audit 2013

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Legal compliance (Acts covered - HR)

Factories Act, 1948 Shop & Establishment Act (state acts)

Payment of Wages Act, 1936 Maternity Benefits Act, 1961

Minimum Wages Act, 1948 Gratuity Act, 1972

Equal Remuneration Act, 1976 ESI Act, 1948

Payment of Bonus Act, 1965 Apprentices Act, 1961

Provident Fund & Misc Provisions Act,

1952

Employment Exchanges (Compulsory

Notification of Vacancies Act), 1959

Contract Labour (Regulation & Abolition) act, 1970

Trade Unions Act, 1926

Workmen Compensation Act, 1923 Private Security Agencies Regulation

Act, 2005

Prevention of Sexual Harassment

(Guidelines) Industrial Disputes Act, 1947

Labour Welfare Act (state acts)

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Legal compliance (Acts covered - Engg.)

Electricity Act, 2003 Environment Protection Act, 1986

Petroleum Act, 1934 Water (Prevention and Control of

Pollution) Act, 1981

Explosives Act, 1884 Air (Prevention and Control of

Pollution) Act, 1981

Boilers Act, 1923 Water Cess Rules, 1977

Legal Meteorology Act, 2011 Hazardous Waste Handling &

Management Rules, 1989

Essential Commodity Act, 1945

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Legal compliance (Acts covered – Tax & Misc)

Micro, Small & Medium

Enterprises Devel. Act, 2006 Central Excise Act, 1944

Central Sales Tax Act, 1956 State VAT Acts

Customs Act, 1962 (export and import

documentation) Service Tax Act, 1955

Income Tax Act (payment of Tax, TDS) Foreign Exchange Management Act

Negotiable Instruments Act, 1881 Industries (Development & Regulation)

Act, 1951

Information Technology Act, 2000 Motor Vehicles Act, 1988

Competition Act, 2002