s ox inventory management risks and controls

8/11/2019 S Ox Inventory Management Risks and Controls

1/19

Unit:

Subject: Sarbanes-Oxley Act Review - Inventory Management

Title: Risk & Control Identification

Year end:

OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE

POTENTIAL RISKSUGGESTED CONTROLS TO MITIGA

(Internal Aud

MILL RAW MATERIALS

Receiving of Raw MaterialsRaw materials are received and accepted only if

they have valid Purchase Orders. (validity)O,F INV101 Raw materials are received and accepted on invalid

Purchase Orders or without Purchase Orders. The

following may be received and ultimately paid for,

rather than returned or refused: unordered raw

materials, excessive quantities, incorrect items,

cancelled or duplicated deliveries. Raw materials that

arrive too early or too late may be accepted. Company

policy is not followed regarding the handling of receipts

for which no Purchase Order can be located on SAP.

The requirement exists that a goods rec

Purchase or Production Order so there

received were ordered. All goods recei

Purchase Order (PO) number. Purchas

documents and is verified for validity.

Raw materials are checked for quantity and quality

before being accepted.O,F,

C

INV102 Raw materials received are not subject to an inspection

for quality / quantity. Criteria are not clearly established

for inspecting received goods and services. No policy

is established for inspecting receipts in proportion to

their importance and value. Only the vendor's delivery

note (and not the physical goods) is matched to thePurchase Order. Inspection results are not recorded to

be available for the vendor evaluation process.

Vendors do not deliver the expected quantity or

materials. Goods receipt discrepancies are not

addressed. Company policy regarding the handling of

under/over deliveries is not followed. Tolerances for

under/over deliveries are set to inappropriate values.

Raw materials are accepted without authorised

documentation (e.g. COAs - Certificate Of Analysis).

Goods counted and inspected before ac

and unacceptable items are returned to

checked for quantity and quality: Quanti

verified by actual count, weight, or meas

department. Quality inspection evidence

notations, receiving reports, or other acin quantity ordered versus quantity ship

less than those indicated on the Purcha

however, quantities more than those ind

Order should be approved by the requis

buyer.

Returns of raw materials to suppliers are properly

handled.O, F INV103 Damaged or low quality goods received are not

properly identified and handled. Defective raw

materials are not returned to the supplier and are

accepted into stock. Accounts payable is not notified of

goods returned to vendor, and the invoice is paid.

Return deliveries are not entered promptly into the

system in order to reverse the goods receipt updates.

No process is established to ensure the vendor issues

credit memos when appropriate.

Defective raw materials received from s

is monitored to ensure that the defective

and that the credit (AP) is received time

are adequately segregated from other r

used. Rejected raw materials are regul

timely return to suppliers. A security che

return form or a delivery note is perform

premises.

Only raw materials received are recorded.

(validity)O, F INV104 Fictitious receipts of raw materials may be recorded.

Invalid materials may be recorded. Payments may be

made for fictitious goods.

SAP edits and validates input GRN data

allowed, for example, for a material mas

Upon entry in the field SAP automatical

against the values available in the confi

receipts are created with reference to a

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE

POTENTIAL RISKSUGGESTED CONTROLS TO MITI

(Internal A

Raw materials received are recorded accurately.

(accuracy)O, F INV105 Raw materials receipts are not recorded accurately.

Incorrect goods receipt information is entered.

Capturing of receipts directly into SAP

levels, Visual checks by operator, e.g

description appears on the screen, Li

quantities (e.g. no negative amounts)

Goods received note (GRN) data on-

created with reference to a Purchase

information from Purchase Order into

SAP material movement automaticall

quantity) and accounting (for value) d

update these items: Purchase Order h

Requirements Planning (MRP) (plann

accounts.

Raw materials received are allocated correctly.

(classification)O, F INV106 Goods receipts do not have the correct account

assignments.

Account assignment is determined at

authorisation (PR / PO).

All raw materials received are recorded.(completeness)

O, F INV107 All raw materials are not recorded when received.Inventory received is not recorded at all. Goods

movements are not captured on SAP (i.e. receipt of

raw materials).

All deliveries must be directed througstores procedures should be impleme

receipts are recorded. Vendor statem

follow-up of invoices without GRNs.

Receipts of raw materials are recorded timeously

and in the correct period. (proper period)O, F INV108 All raw materials received are not recorded in the

period in which they have been received. Goods

receipts are not entered immediately into the system,

particularly on period-end dates.

Documentation in respect of goods re

end of an accounting period is scrutin

ensure complete and consistent reco

Received raw materials are safeguarded. O, F INV109 Raw materials are received by unauthorised personnel.

Received goods are not physically secured to protect

them from theft. Personnel are not required to

acknowledge receipt of goods.

Goods are delivered only to designate

within a warehouse or storage buildin

authorised personnel (stores personn

Raw materials are delivered to the correct

location.O, F INV110 Raw materials are delivered to the incorrect location. Purchase Order forms are pre-printed

that instruct vendors only to deliver to

accompanies vendors which deliver to

environmentally sensitive material to tExpected and overdue orders for raw materials

are monitored.O, F INV111 No monitoring of expected or overdue goods receipts.

Vendors do not deliver on time. No action is taken for

late deliveries.

Expedition of Purchase Orders is cov

cycle.

See weighbridge for relevant controls and risks over

incoming product.

Transfers (issues) of Raw Materials to ProductionIssues from raw materials inventory are made only

on the basis of authorised documents.

(authorisation)

O, F INV201 Goods movements in SAP (inventory transfers,

transfer postings) are not authorised. Unauthorised

issues may be recorded. Incorrect quantities of raw

materials may be transferred to production. Raw

materials not requested transferred to production.

Appropriate documentation is comple

Written stores requisition is required f

Materials are only transferred on the b

source document. Transfer document

transfers, stores or other activities and

material and quantity received. Reque

approval on stores requisitions as ack

All issues of raw materials to production are

accounted for. (completeness)O, F INV202 Issues from raw materials inventory may not be

recorded. Transfer documents may be lost. Goods

movements are not captured in SAP.

Prenumber transfer documents (e.g. s

The sequence of these documents is

Missing documents should be investig

All material is issued in a timely manner. O INV203 Late raw materials issues may resulting in loss of

production time.

A procedure should be established th

order (transfer, work, etc.) within an e

inventory has been picked. By issuing

immediately after the pick has been c

are kept current and the possibility of

to an order is minimized.

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE

POTENTIAL RISKSUGGESTED CONTROLS TO MIT

(Internal A

Issues from raw materials inventory are correctly

recorded as to quantity and amount. (accuracy).

Issues from raw materials inventory are processedin the correct accounting period to the correct

account. (classification and proper period)

O, F INV204 Transfers (issues) of raw materials to production may

not be accurately recorded. Raw materials issues may

be processed in the incorrect period or to the incorrectaccount. Raw materials may be allocated to the

incorrect cost centre. Transfer procedures do not

require preparation of supporting documentation.

Transfers of raw materials are docum

raw materials to production are only d

document. A procedure should be esdocuments are captured in SAP with

after the inventory has been issued. B

immediately after the issue has been

in SAP are kept current and the poss

Physical inventory is counted periodic

reconciled to inventory records and a

Monthly consumption figures are revi

Variances against standard are ident

All materials requisitioned represent valid items

and quantities used in the production of pulp or

paper at the mill. (validity)

O INV205 Raw materials could be used for unauthorised

purposes. Incorrect raw materials are used.

Validations prevent the entry of incor

nonexistent storage locations or mate

reports for goods issued and goods r

reviewed regularly.

Transfers between units/mills are recorded

accurately and timeously.O, F INV206 Transfers between units/mills are not recorded. Require appropriate documentation o

Raw Materials Stores to other busine

See weighbridge for risks relevant to other mass

measurement devices for issues to production.

Storage of Raw MaterialsCompany personnel store materials in accordance

with established Company Policy.O, C INV301 Raw materials inventory is unusable. Chemicals are

not stored in a dry, safe place and separate from other

raw materials. Other raw materials are not usable due

to bad storage.

Develop strategy/policy for storing ma

and type of storage locations to be us

of materials (3) OSHAct requirement

of hazardous materials (4) Storage ca

inventory requirements. A shelf life st

authorised to include any materials th

timeframe for usage. Physical storag

sources of inventory deterioration.

Raw materials inventory is adequatelysafeguarded. There are special safeguards for

expensive material and material susceptible to

personal use or sale.

O, C INV302 Unauthorised access to raw materials inventory -misappropriation of raw materials inventory.

Storage areas secured against unaustock counts should be regularly perf

against unauthorised admission.

All warehouse and inventory locations comply with

appropriate government, regulatory, and company

policies.

O, C INV303 Non-compliance with statute and / or company policy

e.g. with regard to safety, notices. Fines / Loss of

ratings (e.g. NOSA).

Management reviews all physical inve

compliance with government, regulat

Hazardous materials are stored and handled in an

appropriate manner in accordance with applicable

government regulations.

O, C INV304 Hazardous materials are not stored, handled and

transported in compliance with applicable laws and

regulations. Fines / Loss of ratings (e.g. NOSA).

The item master record should conta

as hazardous. Appropriate procedur

hazardous materials should be maint

follow up on reported safety concerns

maintained which are consistent with

Health Administration and other perti

approved at technical and legal perso

monitored.

Receiving and despatch of raw materials are

separate.O INV305 Receiving and despatch of raw materials take place

out of the same entrance. Lack of segregation of

duties.

Physical storage areas for goods issu

be segregated. Different personal ar

and/or issuing raw materials.

Raw materials inventory adjustments (including

scrapping) are valid. (validity)O, F INV306 Adjustments to raw materials inventory prices or

quantities do not relate to valid price changes and

physical inventory differences. Recorded scrapped

raw materials are not valid.

Detailed records maintained for any a

officials are authorised to make raw m

the basis of an authorised source doc

All raw materials inventory adjustments (including

scrapping) are recorded when identified and are

subsequently accounted for as having been

processed. (completeness)

O, F INV307 All adjustments to raw materials inventory are not

recorded.

Inventory adjustments data is edited

are corrected promptly. Maintain proc

inventory records.

Raw materials adjustments (including scrapping)

are processed to the correct account within the

correct accounting period. (classification and

proper period)

O, F INV308 Raw materials adjustments may be processed in the

incorrect period or to the incorrect account. Raw

materials scrapped items are not processed timeously.

Goods received at, before, or after th

are scrutinised and/or reconciled to e

recording in the appropriate period.

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE


(Internal A


are accurately processed. (accuracy)

O, F INV309 Adjustments to raw materials may be inaccurately

recorded or incorrectly processed. Raw materialsscrapped items are not processed accurately. Costs of

scrapped items are not written off.

Raw material adjustments are compa

documents to ensure that they were i


are reviewed and approved by a responsible

official. (authorisation)

O, F INV310 All adjustments to raw materials inventory have not

been authorised in accordance with the appropriate

limit of authority. The scrapping of raw materials is not

authorised.

The officials are authorised to make r

on the basis of an authorised source

reviews and approves all recorded ad

quantities.

Inventory valuation policy is adhered to when

valuing raw materials stock. Inventory reserves

are reviewed and adjusted to ensure that

balances do not exceed net realisable values.

O,

C, F

INV311 Raw materials inventory does not reflect the existing

business circumstances and economic conditions in

accordance with the accounting policies being used.

(lower of cost or Net Realisable value (NRV))

Raw Materials are valued automatica

average price. At the end of each acc

should assess whether there is any in

impaired. The recoverable amount sh

of stock valuation policy by controlling

monthly basis.

Raw materials are issued on a first in first out

basis.O,F INV312 Raw materials inventory may expire - exceed the shelf

life - or become obsolete.

Materials are issued to production on

monitored and there is regular turnov

limiting the risk of obsolescence.Inventory levels are maintained in accordance with

established Company Policy. Limits are placed on

quantities to be maintained in inventory. The

adequacy and appropriateness of inventory levels

is monitored.

O INV313 Inadequate or inappropriate inventory levels are

maintained. Unanticipated or excess inventory carrying

costs may be incurred.

Management monitors the adequacy

inventory levels. Stock level policies a

replenishment cycles, safety stock lev

and this plan is communicated to app

replenishment policies are periodicall

ensure policies meet changing compa

stock is maintained at the lowest prac

economise the use of working capital

storage.Individual inventory balances per SAP are

periodically compared to the physical inventory of

raw materials. (completeness, accuracy and

validity)

O,F INV314 Inventory balances may be incorrectly recorded.

Correct raw materials stock count procedures are not

followed (e.g. as regards cut-off.) Stock counts of raw

materials are not properly recorded.


day-to-day custody or recording of inv

reconciled to inventory records and in

to the general ledger.

Adjustments resulting from the comparison of

physical to recorded inventory of raw materials areapproved by a responsible official. (authorisation)

O,F INV315 Raw materials stock count adjustments are not

authorised, or are inaccurate or incomplete. Rawmaterials stock count differences are not investigated

and corrected.

Raw material stock count adjustment

identified errors are corrected promptadjustments are compared to authori

ensure that they were input accurately

Raw materials inventory is usable. Inventory is

periodically reviewed for excess and

obsolescence issues.

O INV316 Obsolete and slow moving raw materials items have

not been identified.

The usability of raw materials is asses

during physical inventory counts. Inve

prepared and analysed regularly.

Replacement items have been ordered (if

required) for raw materials scrapped.O INV317 Replacement items have not been ordered (if required)

for raw materials scrapped.

System functionality monitors and ma

accordance with organisation policies

Scrapped raw materials are kept separate from

other inventory.O INV318 Scrapped raw materials are not kept separate from

other inventory.

Obsolete, excess, and damaged inve

segregated from other finished goods

to ensure appropriate and timely disp

Sufficient inventory of raw materials is kept on

hand. Stock balances are adequate to support the

current rate of consumption, with regard to

economy.

O INV319 Insufficient raw materials inventory levels resulting in

loss of production time or excess inventory or

inaccurate or untimely material requirement forecast.

Management monitors the adequacy

inventory levels or SAP functionality m

inventory levels in accordance with o

Raw Materials Master DataOnly valid changes are made to the raw materials

master data file. (validity)O INV401 Changes to raw materials master data are not valid. A procedure is established that chang

master record are documented on a v

approved by owner of the material ma

entered during raw materials master c

automatically validated by SAP. For e

allowed for base unit of measure, pric

organisation and account group are k

field, the system automatically checks

values available in the configuration t

generated if the value entered is not a

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE

POTENTIAL RISKSUGGESTED CONTROLS TO MITIG

(Internal A

Duplicate raw materials master records are

avoided.O INV402 Duplicate raw materials master data may be created.

The same material is defined more than once in the

masterfile but with different names. This may result in

incomplete materials management reporting due to

more than one material number and/or confusion when

selecting material when processing Purchase Orders.

All raw material master entries must be

material master before entry into SAP

unnecessary duplication of materials in

naming conventions are used to reduc

material names. The Material List (RM

and reviewed at least quarterly or as n

This lists materials by number, type, gr

material. Duplicate materials will be inv

material master record if they are not h

BOM, or purchase requisition or Purch

Raw material master data changes are approved

by a responsible official. (authorisation)O INV403 Changes to raw materials master data are not

authorised.

The officials are authorised to enter, m

master data only on the basis of an au

Significant changes to the raw materia

management.

Changes to raw materials master data are

accurate. (accuracy)O INV404 Inaccurate raw materials data may be entered.

Changes to raw materials master data may be

incorrect. For example, a material may be

characterised as an inappropriate material type.

The officials (responsible for maintena

data) shall authorise all requests for m

master data after having checked the c

the data supplied. SAP edits and valid

online. Recorded changes to the mate

compared to authorised source docum

input accurately.

All valid and authorised changes to raw materials

master data are processed. (completeness)O INV405 Not all valid changes to the raw materials master data

are input and processed. Not all materials are included

in the material master.

Requests to change raw material mas

prenumbered forms, the numerical seq

accounted for to ensure that all reques

Raw material master information is recorded in a

consistent and complete fashion to expedite

production and procurement functions. Material

master data information is complete.

O INV406 Incomplete raw material master data may be entered.

Critical fields that must be entered are not specified as

mandatory. Not all materials components (general,

plant, storage location, batch valuation, forecast) are

established.

The field status group defines for a pa

fields are mandatory.

Changes to the raw materials master file are

processed timeously. (proper period)O INV407 Changes to raw materials master data are not

processed timeously.

Requests to change raw material mas

is reviewed to ensure that all request c

timeously.

Raw materials master data remains pertinent. O INV408 Raw material master file data does not remain

pertinent. Material master data no longer needed is

not deleted/archived from the system.

Raw material master file data is period

management for accuracy and ongoin

have not been used for a significant pe

ensure that the material master file rem

All changes to, and deletion, of raw materials

master data records must be properly logged,

documented and retained. The accuracy and

timeliness of changes to the material master

record is reviewed.

O INV409 Changes to raw materials master data are not

supported by valid documentation. Required

documentation is not retained for mandatory retention

periods. Changes to raw materials master data are not

reviewed by a senior member of staff. No responsibility

is assigned for regularly reviewing audit trails of change

information.

Recorded changes to raw materials m

authorised source documents by a sen

that the correct changes were made.

generated using SAP (MM04). A list is

change, old and new values for fields a

the change.

MILL ENGINEERING (STORES ITEMS)

Receiving of Engineering Stores itemsEngineering stores items are received and

accepted only if they have valid Purchase Orders.

(validity)

O,F INV501 Engineering stores items are received and accepted

on invalid Purchase Orders or without Purchase

Orders. Company policy is not followed regarding the

handling of receipts for which no Purchase Order can

be located on SAP.

The requirement exists that a goods re

Purchase or Production Order so there

received were ordered. All goods rece

Purchase Order (PO) number. Purcha

documents and is verified for validity.

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OBJECTIVE

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(Internal A

Engineering stores items are inspected before

acceptance.O,F INV502 Engineering stores items received are not subject to an

inspection for quality / quantity. Criteria are not clearly

established for inspecting received goods. No policy is

established for inspecting receipts in proportion to their

importance and value. Only the vendor's delivery note

(and not the physical goods) is matched to the

Purchase Order. Inspection results are not recorded to

be available for the vendor evaluation process.

Vendors do not deliver the expected quantity or

materials. Goods receipt discrepancies are not

addressed. Company policy regarding the handling of

under/over deliveries is not followed. Tolerances for

Goods counted and inspected before

and unacceptable items are returned

checked for quantity and quality: Qua

verified by actual count, weight, or me

department. Quality inspection eviden

notations, receiving reports, or other a

in quantity ordered versus quantity sh

less than those indicated on the Purc

however, quantities more than those

Order should be approved by the requ

buyer.

Returns of engineering stores items to suppliers

are properly handled.O,F INV503 Damaged or low quality goods received are not

properly identified and handled. Defective engineering

stores items are not returned to the supplier and are

accepted into stock. Accounts payable is not notified of

goods returned to vendor, and the invoice is paid.Return deliveries are not entered promptly into the

system in order to reverse the goods receipt updates.

No process is established to ensure the vendor issues

credit memos when appropriate.

Defective engineering stores items re

logged. The log is monitored to ensur

returned promptly and that the credit (

Rejected engineering stores items are

other engineering stores items and retimely return to suppliers. A security c

return form or a delivery note is perfor

premises.

Only engineering stores items received are

recorded. (validity)O,F INV504 Invalid receipts of engineering stores items are

recorded.

SAP edits and validates input GRN da

allowed, for example, for a material m

Upon entry in the field SAP automatic

against the values available in the co

receipts are created with reference to

Engineering stores items received are recorded

accurately. (accuracy)O,F INV505 Engineering stores receipts are not recorded

accurately. Incorrect goods receipt information is

entered.

Capturing of receipts directly into SAP

levels, Visual checks by operator e.g.

description appears on the screen, Li

quantities (e.g. no negative amounts)

GRN data on-line. Most goods receipa Purchase Order. SAP then copies

Order into GRNs per configuration. Th

automatically creates both a material

(for value) document. The transaction

Order history, stock overview, MRP (p

accounts.

Engineering stores items received are allocated

correctly. (classification)O,F INV506 Receipts of engineering stores items do not have the

correct account assignments.

Account assignment is determined at

authorisation (PR / PO).

All engineering stores items received are

recorded. (completeness)O INV507 All engineering stores items are not recorded.

Inventory received is not recorded at all.

All deliveries must be directed throug

stores procedures should be impleme

receipts are recorded. Vendor statem

follow-up of invoices without GRNs.

Receipts of engineering stores items are recorded

timeously and in the correct period. (properperiod) Perpetual inventory records are updated

as of the date the goods are received.

O,F INV508 All engineering stores items received are not recorded

in the period in which they have been received.Goods movements are not captured on SAP (i.e.

receipt of engineering stores items).

Documentation in respect of goods re

end of an accounting period is scrutinensure complete and consistent recor

Received engineering stores items are

safeguarded. Engineering stores items are

delivered to the correct location.

O,F INV509 Raw materials are received by unauthorised personnel.

Received goods are not physically secured to protect

them from theft. Personnel are not required to

acknowledge receipt of goods. Engineering stores

items are delivered to the incorrect location.

Goods are delivered only to designate

within a warehouse or storage building

authorised personnel. Purchase Ord

receiving location and instruct vendor

Expected and overdue orders for engineering

stores items are monitored.O,F INV510 No monitoring of expected or overdue goods receipts.

Vendors do not deliver on time. No action is taken for

late deliveries.

Expedition of purchase orders is cove

cycle.

Engineering Stores items sent for repairs

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(Internal A

The costs relating to items sent out for repairs are

allocated accurately. (classification)O,F INV601 Costs are not allocated to the correct department or

not allocated accurately. Incorrect costs are allocated

to the works order. Repairs are not allocated to the

correct sub-order or allocated to the incorrect sub-

order.

All costs of repairs allocated should be

accuracy.

Items sent out for repair are repaired timeously. O INV602 Repairs are not done or not done timeously. A maintenance register should be kep

each engineering stores item. The ma

regularly reviewed to identify engineer

The correct repairs are performed on items sent

out for repairs. (accuracy)O INV603 Incorrect repairs are performed. Scope of repairs are

not received from vendors or are incorrect. Repair

history does not accompany item to be repaired and

repairs are not done in terms of valid documentation.

All repairs should be supported by aut

documentation should state what repa

repair history.

Items to be sent out for repair are approved by a

responsible official, to ensure inter alia, that

repairs are correctly allocated internally orexternally. (authorisation)

O,F INV604 Workshop foreman does not inspect repairable item

before repairs are undertaken. Items that could be

repaired internally are sent out for repair at highercosts to the company. Repairs are commissioned /

undertaken without appropriate authorisation.

Only repairs which have been authoris

allocated to the works order. Repairs

specialist to determine whether the repAll repairs should be authorised in term

Items sent out for repair are accounted for and

controlled.O INV605 Items sent for repair are swapped with inferior items

before they are sent back to the mill. Long outstanding

items are not followed up. Vendors do not return

scrapped items to the mill and items are not sent to the

salvage yard at the mill. Items sent for repair are not

returned.

A repairs register should exist. The reg

examined to identify long outstanding

outstanding repairs should be investiga

supporting the item to be repaired sho

make, model and serial number. These

the item on return. All outstanding item

followed up. All scrapped items should

and sent to the salvage yard.

Transfers (issues) of Engineering Stores items to the PlantIssues from engineering stores inventory are

made only on the basis of authorised documents.

(authorisation)

O,FINV701 Unauthorised issues may be recorded. Incorrect

quantities of engineering stores are transferred to the

plants. Engineering stores not requested may be

transferred to production.

Written stores requisition is required fo

Materials are only transferred on the b

source document. Transfer documenta

transfers, stores or other activities and

material and quantity received. Reque

approval on stores requisitions as ackn

All issues of engineering stores to the plants are

accounted for. (completeness)O,F INV702 Issues from engineering stores inventory may not be

recorded. Goods movements are not captured in SAP.

Prenumbered transfer documents (e.g

exist. The sequence of these docume

Missing documents should be investig

Issues from engineering stores inventory are

correctly recorded as to quantity and amount.

(accuracy) Issues from engineering stores

inventory are processed in the correct accounting

period to the correct account. (classification andproper period)

O,F INV703 Transfers of engineering stores to the plant may not be

accurately recorded. Engineering stores issues may be

processed in the incorrect period or to the incorrect

account. Engineering stores may be allocated to the

incorrect cost centre.

Transfers of raw materials are docume

raw materials to production are only do

document. A procedure should be esta

documents are captured in SAP within

after the inventory has been issued. Byimmediately after the issue has been c

in SAP are kept current and the possib

Physical inventory is counted periodica

reconciled to inventory records and a t

Monthly consumption figures are revie

Variances against standard are identif

All engineering stores items requisitioned

represent valid items and quantities used in the

production of pulp or paper at the mill. (validity)

O INV704 Engineering stores items could be used for

unauthorised purposes or personal gain.

Security perform random checks on pe

mill.

Storage of Engineering Stores Items

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OBJECTIVE

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(Internal A

Company personnel store engineering stores

items in accordance with established Company

Policy.

O,C INV801 Engineering stores items are unusable due to bad

storage.

Develop strategy/policy for storing m

and type of storage locations to be us

of materials (3) OSHAct requirement

of dangerous equipment (4) Storage

inventory requirements. Physical stor

for sources of inventory deterioration

All warehouse and inventory locations comply with

appropriate government, regulatory, and company

policies.

O,C INV802 Non-compliance with statute and / or company policy

e.g. with regard to safety, notices.

Management reviews all physical inve

compliance with government, regulat

Engineering stores items are adequately

safeguarded. There are special safeguards for

expensive material and material susceptible to

personal use or sale.

O,C INV803 Unauthorised access to engineering stores items.

Engineering stores items may be stolen, lost,

damaged, or temporarily diverted. Fines / Loss of

ratings (e.g. NOSA).

Access should be restricted to autho

security arrangements (fencing and g

periodic stock counts should be regu

Dangerous equipment is stored handled and

handled in an appropriate manner in accordance

with applicable government regulations.

O,C INV804 Dangerous equipment is not stored handled and

transported in compliance with applicable laws and

regulations. Fines / Loss of ratings (e.g. NOSA).

Appropriate procedures for handling

equipment should be maintained. Th

on reported safety concerns. Relevan

which are consistent with Occupation

Administration and other pertinent law

technical and legal personnel. Comp

Engineering stores inventory adjustments

(including scrapping) are valid. (validity)O,F INV805 Adjustments to engineering stores inventory prices or


physical inventory differences. Recorded scrapped

engineering stores items are not valid.

Detailed records maintained for any a

are authorised to make engineering s

only on the basis of an authorised so

All engineering stores inventory adjustments

(including scrapping) are recorded when identified

and are subsequently accounted for as having

been processed. (completeness)

O,F INV806 All adjustments to engineering stores inventory are not

recorded.

Inventory adjustments data is edited

are corrected promptly. Maintain proc

inventory records.


(including scrapping) are processed to the correct

account within the correct accounting period.

(classification and proper period)

O,F INV807 Engineering stores inventory adjustments may be


account. Engineering stores scrapped items are not


Goods received at, before, or after th

are scrutinised and/or reconciled to e



(including scrapping) are accurately processed.

(accuracy)

O,F INV808 Adjustments to engineering stores inventory may be

inaccurately recorded or incorrectly processed.

Engineering stores scrapped items are not processed

accurately. Costs of scrapped items are not written off.

Engineering stores adjustments are c

documents to ensure that they were


(including scrapping) are reviewed and approved

by a responsible official. (authorisation)

O,F INV809 All adjustments to engineering stores inventory have

not been authorised in accordance with the appropriate

limit of authority. The scrapping of raw materials is not

authorised.

Inventory adjustments are compared

documents. Management reviews an

adjustments to inventory prices or qu


valuing stock of engineering stores items.

Inventory reserves are reviewed and adjusted to

ensure that balances do not exceed net realisable

values.

O,F,

C

INV810 Engineering stores inventory does not reflect the

existing business circumstances and economic

conditions in accordance with the accounting policies

being used.

Engineering stores items are valued

of each accounting period managem

is any indication that inventory may b

amount should be estimated.

Individual inventory balances per SAP areperiodically compared to the physical inventory of

Engineering stores items. (completeness,

accuracy and validity)

O,F INV811 Inventory balances may be incorrectly recorded.Correct engineering stores stock count procedures are

not followed (e.g. as regards cut-off). Stock counts of

engineering stores items are not properly recorded.

Physical inventory is counted periodiday-to-day custody or recording of in




physical to recorded inventory of engineering

stores items are approved by a responsible

official. (authorisation)

O,F INV812 Engineering stores stock count adjustments are not

authorised, or are inaccurate or incomplete.

Engineering stores stock count differences are not

investigated and corrected.

Stock count adjustment data is edited

are corrected promptly.

Engineering stores inventory is usable. Inventory

is periodically reviewed for excess and

obsolescence issues.

O INV813 Obsolete and slow moving engineering stores items

have not been identified.

The usability of raw materials is asses

during physical inventory counts. Inve

prepared and analysed regularly.

Scrapped engineering stores items are kept

separate from other inventory.O,F INV814 Scrapped inventory stores items are not kept separate

from other inventory.


segregated from other stores invento

ensure appropriate and timely dispos

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE


(Internal A

Sufficient inventory of engineering stores is kept

on hand.O,F INV815 Insufficient inventory levels of engineering stores

resulting in loss of production time or excess inventory

or inaccurate or untimely material requirement forecast.


segregated from other stores inventor

ensure appropriate and timely dispos

Engineering Stores Master DataOnly valid changes are made to the engineering

stores master data file. (validity)O INV901 Changes to engineering stores master data are not

valid.

A procedure is established that chang

master record are documented on a v

approved by owner of the material ma

entered during engineering stores ma

change is automatically validated by S

that are allowed for base unit of meas

organisation and account group are k

field, the system automatically checks

values available in the configuration ta

generated if the value entered is not a

Duplicate engineering stores material masterrecords are avoided.

O INV902 Duplicate engineering stores master data may becreated. The same material is defined more than once

in the masterfile but with different names. This may

result in incomplete materials management reporting

due to more than one material number and/or

confusion when selecting material when processing

Purchase Orders.

All engineering stores master entries existing material master before entry

unnecessary duplication of materials i

naming conventions are used to redu

material names.

Engineering stores master data changes are

approved by a responsible official. (authorisation)O INV903 Changes to engineering stores master data are not

authorised.


stores material master data only on th

document. Significant changes to the

approved by management.

Changes to engineering stores raw materials

master data are accurate. (accuracy)O INV904 Inaccurate engineering stores master data may be

entered. For example, a material may be characterised

as an inappropriate material type.


master data) shall authorise all reques

material master data after having che

accuracy of the data supplied. SAP e

master records online. Recorded chadata are compared to authorised sou

they were input accurately.All valid and authorised changes to engineering

stores master data are processed. (completeness)O INV905 Not all valid changes to engineering stores master data

are input and processed. Not all engineering stores

are included in the material master.

Requests to change engineering store

submitted on prenumbered forms, the

forms is accounted for to ensure that

processed.

Engineering stores master information is recorded

in a consistent and complete fashion to expedite

sales, production and procurement functions.

Material master data information is complete.

O INV906 Incomplete material master data may be entered.


mandatory. Not all material components (general,


established.



Changes to the engineering stores master file are

processed timeously. (proper period)O INV907 Changes to engineering stores master data are not


Material master file data is periodically

accuracy and ongoing pertinence. Ma

for a significant period of time are revi

material master file remains up-to-dat

Engineering stores master file remains pertinent. O INV908 Engineering stores master file data does not remainpertinent. Engineering stores material master data no

longer needed is not deleted/archived from the system.

Engineering stores management masreviewed by management for accurac

All changes to, and deletion of, engineering stores




record is reviewed.

O INV909 Changes to engineering stores master data are not



periods. Changes to engineering stores master data

are not reviewed by a senior member of staff. No

responsibility is assigned for regularly reviewing audit

trails of change information.

Recorded changes to engineering sto

compared to authorised source docum

staff to ensure that the correct change

PRODUCTION

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE


(Internal Au

Production Planning and ControlAll production orders are accounted for as having

been fulfilled. (completeness) Production orders

are created and released on a timely basis to

allow for timely meeting of commitments to

customers.

O INV

1001

Work-in-progress may not be completed timeously,

and as a result commitments to customers may not be

met, or finished goods may be unsaleable.

Production plans and their associated

entered timely in the system which help

lead times are met. There is an establ

procedure that includes the timeliness

Production orders are accurately prepared.

(accuracy)O INV

1002

Incorrect product may be manufactured resulting in

unsaleable finished goods.

Production orders are approved by a responsible

official. (authorisation)O,F INV

1003

The company may produce unacceptable products or

quantities of products in excess of acceptable levels;

this could result in obsolete, excess, or otherwise

unsaleable inventory; it could also result in abnormal

sales returns because of unacceptable product quality.

Only authorised personnel may enter d

release production plans to help ensur

production data. Only authorised pers

process planned production orders to h

production records.

Production operates consistent with management

intent and the approved production plans. Thevarious measurements/criteria reporting are

enabled and are properly approved.

O INV

1004

Production may not be planned in an orderly manner.

Incorrect manufacturing processes may be usedresulting in unsaleable finished goods.

Various reports are available from SAP

reviewed periodically by Production Maensure the proper production control. T

procedures that define the process by

measurements and reporting is determ

Processing and Recording of Production CostsThe use of labour, materials and plant in

production is recorded. All labour, materials, and

overhead recovery bases are accounted for as

having been processed to cost of production.

(completeness)

O,F INV

1101

Production costs may not be accounted for. All direct

and indirect expenses associated with production may

not be recorded as production costs.

Costs associated with raw materials, la

independently reconciled to appropriat

Labour, materials, overhead recovered and other

production measurements are accurately

recorded. (accuracy) To properly account for

productions costs, collected machine costs (run-times, set-up costs, changeover costs,

maintenance costs), labour costs (standard costs,

actual costs, overtime costs) collected/entered are

accurate.

O,F INV

1102

Production costs may be inaccurately recorded. Reconciliations of quantities set forth in

used in production. Costs associated w

overhead are independently reconciled

records. When standard costing is usestandard costs and reviews variances

costs. Significant variances are investi

used, management reviews actual cos

day-to-day activities.

Production costs are recorded against the

appropriate production units in the correct

accounting period. (classification and proper

period)

O,F INV

1103

Production costs may be recorded against incorrect

production units or the incorrect period.

SAP account assignment configuration

materials are posted to the appropriate

Management should review the record

production units to ensure that they ha

and in the correct period.

Labour, materials, and plant are used in

production only if authorised. (authorisation)O,F INV

1104

Unauthorised factors of production may be used and

result in irrecoverable costs. The production

processes and inventory holdings may be sub-optimal

and result in irrecoverable costs.

Only authorised costs should be alloca

Defective Products and ScrapAll defective products, by products and scrap

resulting from the production process are

authorised. (authorisation)

O INV

1201

Scrapped items (broke) are not authorised. Materials

are transferred to scrap without proper authorisation.

All products are inspected before bein

inventory: products not meeting specif

reworked or scrapped. Separate pers

for write-offs. Items identified as scrapp

authorised prior to being written down

All defective products and scrap resulting from the

production process are valid and recorded

completely and accurately in the appropriate

period. (completeness, accuracy, and validity)

O,F INV

1202

Scrapped items (broke) are not valid. Inventory is

intentionally scrapped to facilitate misappropriation.

All scrap items (broke) should be writte

broke is reviewed by the Production D

management team. Abnormal wastage

actual production versus budget are in

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE


(Internal Au

The reporting of defective products and scrap is

recorded completely and accurately in the

appropriate period. (completeness, accuracy, and

proper period)

O,F INV

1203

Broke not monitored, not properly reported (production

inefficiencies result in excess waste). Sale of broke not

reported properly. Broke or proceeds from sale of

broke misappropriated.

Management, based on their knowledg

review records of scrapped and rework

such items have been correctly identifie

the appropriate accounting period.

Orders are fulfilled if make is broked. O INV

1204

Due to broking of original make, customer or

replenishment order is not fulfilled.

The customer should be notified of any

order.

Scrapped (broke) and by-product items are kept

separate from other inventory.O INV

1205

Scrapped (broke) items not kept separate from other

inventory. Scrapped (broke) items may be

despatched.

Rejected work in process is adequately

in progress and is monitored to ensure

a timely basis.

Production Master Data (BOMs - Bill of Material)Only valid changes are made to the BOMs.

(validity) Only valid BOMs are created and saved.O,F INV

1301

Changes to BOMs are not valid. Incorrect product

costing.

A procedure is established that change

documented on a valid source docume

management. All information entered d

and/or change is automatically validateChanges to the BOMs are approved by a

responsible official. (authorisation)O,F INV

1302

Changes to BOMs are not authorised. SAP may be configured to process all B

engineering change (with history) proce

and proper approvals.

Changes to the BOMs are accurate. (accuracy)

BOMs and their associated data are created and

saved accurately which helps ensure accurate

inventory valuation and cost of goods sold.

O,F INV

1303

Changes to the BOMs may be incorrect. Bill of

Materials changes are entered incorrectly.

The officials (responsible for maintenan

authorise all requests for changes to th

the contents and the accuracy of the da

validates material master records onlin

BOMs are compared to authorised sou

they were input accurately.

Material master information is recorded in a

consistent and complete fashion. All BOM master

data is complete (including all relevant views for

manufacturing planning and execution) to ensure

material master data integrity.

O,F INV

1304

Incomplete BOMs data may be entered. Critical fields

that must be entered are not specified as mandatory.

SAP is configured with mandatory fields

entry of this information.

All valid and authorised changes to BOMs areprocessed. (completeness)

O,F INV1305

Not all valid changes to the BOMs are input andprocessed.

Requests to change BOM master file dprenumbered forms, the numerical seq

accounted for to ensure that all request

Changes to the BOMs are processed timeously

(proper period) to help ensure the existence of

pertinent master records.

O,F INV

1306

Changes to BOMs are not processed timeously. Requests to change BOM master file d

reviewed to ensure that all request cha

All changes to and deletion of BOMs must be

properly logged, documented and retained.O,F INV

1307

Changes to BOMs are not supported by valid

documentation. Changes to BOMs are not reviewed by

a senior member of staff.

Recorded changes to BOM master file

authorised source documents by a sen

that the correct changes were made.

Paper ConvertersInventory transfers to / from paper converters

("subcontractors") are complete, accurate and

valid to ensure material transaction integrity and

that stock is properly tracked and safeguarded.

O,F INV

1401

Loss of stock sent to converters. Inaccurate reporting

of costs relating to stock sent to converters.

SAP standard functionality requires tha

recorded through a material document

specific movement types, reason for m

locations for material transfers to subco

with edit checks, mandatory fields, and accurate data entry of material movem

are established for the regular review o

Material Report for inappropriate mater

storage locations.

MILL FINISHED GOODS

Receipt of Finished Goods from Production

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14/19

OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE


(Internal A

Deliveries / shipments are recorded timeously and

in the correct period. Appropriate cut-off

procedures are used to ensure deliveries are

invoiced in the correct period. (proper period)

O,F INV

1713

Goods issue transactions are not created promptly

after the goods are shipped. Goods issue

transactions are posted in the incorrect period.

Shipments may not be recorded in the period they are

shipped. Deliveries may be invoiced in the incorrect

period. No review is performed to ensure that goods

issue has occurred for all shipments.

Goods shipped at, before, or after the

are scrutinised and/or reconciled to en

recording in the appropriate accountin

and recording of the related invoice.

Recorded shipping transactions are valid. (validity) O,F INV

1714

Shipping transactions may be purposefully or

erroneously altered, resulting in incorrect invoicing and

misstated revenues and receivables.

Sales order entry, shipping, and invoic

an integrated application system. The

updated for all valid deliveries.

Controls over manual delivery documents are

adequate (in particular to ensure that all

shipments are recorded).

O,F INV

1715

Manual delivery documents not actioned and recorded

in SAP.

Manual documents should be process

and running. Manual documents shou

information processed on SAP. Policie

for using manual delivery notes.

Appropriate procedures are in place to control

situations when SAP is off-line.O,F INV

1716

Goods not despatched due to system being offline or

down.

Manual documents are in use, and are

Policies and procedures are in place f

Shipments are delivered in a cost-effective

manner. Routes and vehicles are appropriate forthe movement of goods and materials.

O,F INV

1717

Inappropriate vehicles and/or routes may be used

resulting in unnecessary costs to the Company.

Contracts with haulage contractors sp

(regardless of vehicle / route).

Finished Goods - Cost of Sales

Costs of shipped inventory are transferred from

inventory to cost of sales. (completeness)F INV

1801

Recorded Cost of Sales may be incomplete.

(understated)

Maintain procedures for promptly upd

Costs of shipped inventory are recorded

accurately (accuracy) and posted correctly

(classification).

F INV

1802

Recorded Cost of Sales may be inaccurately

calculated.

SAP account assignment configuratio

shipped goods are posted to the appr

account

Amounts posted to Cost of Sales represent those

associated with shipped inventory. (validity)F INV

1803

Cost of Sales transactions may be invalid. Cost of sales is periodically reviewed

and ongoing pertinence.

Costs of shipped inventory are transferred from

inventory to Cost of Sales timeously and in the

appropriate period. (proper period)

F INV

1804

Cost of sales transactions may be recorded in the

incorrect period. Incorrect costing methods may be

used.

Management reviews relevant costs o

related to order entry, shipping, invoic

significant unusual relationships are m

Storage of Finished GoodsReceiving and despatch of finished goods are

separate.O INV

1901

Receiving and despatch take place out of same

entrance.

The warehouse layout will be establis

shipping locations. A separate entran

Security should ensure deliveries and

correct location.

Finished goods inventory adjustments (including

write-offs) are valid. (validity)O,F INV

1902

Adjustments to finished goods inventory prices or


physical inventory differences. Adjustments may be

processed that are not acceptable to management e.g.

saleable inventory may be improperly written off and

scrapped.

Finished goods adjustments are comp

documents to ensure that they were in

reviews and approves all recorded ad

quantities.

All finished goods inventory adjustments (including

write-offs) are recorded when identified and are

subsequently accounted for as having been

processed. (completeness)

O,F INV

1903

All adjustments to finished goods inventory are not

recorded.

Inventory adjustments data is edited a

are corrected promptly. Inventory adju

the sequence of such forms is accoun


write-offs) are processed to the correct account

within the correct accounting period. (classification

and proper period)

O,F INV

1904

Finished goods inventory adjustments may be


account. Scrapped (written-off to broke) items may not

be processed timeously.

Goods received at, before, or after the

are scrutinised and/or reconciled to en



write-offs) are accurately processed. (accuracy)O,F INV

1905

Adjustments to finished goods inventory may be

inaccurately recorded or incorrectly processed. Write-

offs of finished goods items may not be processed

accurately. Costs of items broked are not written off

correctly.

Finished goods adjustments are comp

documents to ensure that they were in

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE


(Internal A

Finished goods inventory adjustments (includingwrite-offs) are reviewed and approved by a

responsible official. (authorisation).

O,F INV1906All adjustments to finished goods inventory have notbeen authorised in accordance with the appropriate

limit of authority. The write-off of finished goods items

to broke may not be authorised. Possible irregularity:

unwarranted reduction of inventory value to facilitate

"bargain" purchases by employees or third parties.

Inventory adjustments are compareddocuments. Management reviews an

adjustments to inventory prices or qu


valuing finished goods stock. Inventory reserves

are reviewed and adjusted to ensure that

balances do not exceed net realisable values.

Inventory is carried at the lower of cost or market

value.

O,F,

C

INV

1907

Finished goods inventory does not reflect the existing

business circumstances and economic conditions in

accordance with the accounting policies being used.

(Loss not provided for: inventory valued at above

market price). Continued production of items being

sold at a loss.

At the end of each accounting period

whether there is any indication that in

recoverable amount should be estim

valuation policy by controlling when v

Individual inventory balances per SAP are

periodically compared to the physical inventory of

finished goods stock. (completeness, accuracy

and validity). Physical verification of inventory is

conducted regularly and accurately.

O,F INV

1908

Inventory balances may be incorrectly recorded. SAP

inventory records may have overstated quantities on

hand. Book inventory quantities are inaccurate causing

stock outs or excess inventories and misstated

financial statements.


day-to-day custody or recording of in



Correct finished goods stock count procedures

are followed in order to detect any physical loss of

finished goods inventory. (validity) Physical

verification of inventory is appropriately planned.

O INV

1909

Undetected physical loss or deterioration of inventory.

The physical inventory process and timing is not in

accordance with company policy. Instructions for

performing the physical verification are inadequate. No

preliminary warehouse clean-up is performed (reducing

damaged, failed inspection and in-transit inventory).

Goods receipts and issues are not processed prior to

physical verification. Materials are inadvertently

excluded from the verification process. Inventory

documents are mislaid so the count is incomplete.

Appropriate cut-off procedures are not documented,

planned, followed and communicated. Inventory

balances are not "frozen" at the time of the account toensure proper cut off and to prevent artificial

discrepancies or incorrect adjustments being made.

Company owned materials at all locations(e.g.

materials at customers or third party warehouses) are

not physically verified. Non-Company owned material is

counted in the company's own inventory. Possible

irregularity: non-existent items are included in periodic

physical inventory count.

Stock counts should be performed in

policy. Employees who perform the c

guidelines. Procedures should ensur

not inadvertently counted in Compan

count documents are retained after th

audit trail).


physical to recorded inventory of finished goods

stock are completely and accurately recorded, and

are approved by a responsible official.

(authorisation)

O,F INV

1910

Finished goods stock count differences are not

investigated and corrected. Adjustments may be

recorded to conceal physical shortages. Incorrect

inventory differences are recorded. No report of

differences is produced or reviewed by management.

Inventory differences are posted to the incorrect GL

account. Posting of inventory differences is notappropriately authorised.

Finished goods stock count adjustme

identified errors are corrected promp

adjustments are compared to author

ensure that they were input accuratel

Inventory is managed to prevent obsolescence

and excessive write-offs. Obsolete, slow-moving

and/or overstocked inventory is prevented or

promptly detected and provided for.

O INV

1911

Obsolete and slow moving finished goods stock items

have not been identified and are maintained in

inventory. Inventory known to be obsolete or slow-

moving not written-off. Continued production of

finished goods stock that cannot be sold.

Inventory ageing reports are prepare

necessary follow-up action is comple

are performed to assess whether suc

inventory, reworked, or scrapped.

Sufficient inventory of finished goods is kept on

hand.O,F INV

1912

Insufficient finished goods inventory levels resulting in

loss of sales.

System functionality monitors and ma

accordance with organisation policies

Finished goods inventory is protected from

damage.O INV

1913

Handling and storage procedures are inappropriate for

the nature of the products. Finished goods are not

stored in an appropriate environment. (safe and dry)

Physical storage methods are regula

inventory deterioration.

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE


(Internal A

Physical loss of finished goods inventory is

prevented.O INV

1914

Unauthorised access to inventory. Finished goods

may be stolen, lost, damaged, or temporarily diverted.

Access should be restricted to author

security arrangements (fencing and g

Periodic stock counts should be regushipping label and bar code contain a

a coding structure in place which ens

traceability of finished product.

Finished Goods Master DataOnly valid changes are made to finished goods

master data. (validity)O INV

2001

Changes to finished goods master data are not valid. A procedure is established that chang

record are documented on a valid so

owner of the material master informat

during material master creation and/o

validated by SAP. For example, the v

unit of measure, pricing group, purch

group are known to SAP. Upon entry

automatically checks the value entere

in the configuration tables. An error mvalue entered is not available.

Duplicate finished goods material master records

are avoided.

INV

2002

The same material is defined more than once in the

masterfile but with different names. This may result in

incomplete materials management reporting due to

more than one material number and/or confusion when

selecting material when processing Sales Orders.

All material master entries must be re

material master before entry into SAP

unnecessary duplication of materials

naming conventions are used to redu

material names.

Changes to finished goods master data are

approved by a responsible official. (authorisation)O INV

2003

Changes to finished goods master data are not

authorised.


data only on the basis of an authorise

changes to the material master file ar


accurate. (accuracy)O INV

2004

Changes to finished goods master data may be

incorrect. For example, a material may be

characterised as an inappropriate material type.


shall authorise all requests for modific

data after having checked the conten

supplied. SAP edits and validates ma

Recorded changes to the material ma

authorised source documents to ensu

accurately.

All valid and authorised changes to finished goods

master data are processed. (completeness)O INV

2005

Not all valid changes to the finished goods master data

are input and processed. Not all materials are included

in the material master.

Requests to change finished goods m

prenumbered forms, the numerical se

accounted for to ensure that all reque

Material master information is recorded in a

consistent and complete fashion to expedite sales,

production and procurement functions. Material

master data information is complete.

INV

2006

Incomplete material master data may be entered.


mandatory. Not all materials components (general,





processed timeously. (proper period)

O INV

2007


processed timeously. Obsolete materials are notdeactivated immediately to prevent sales orders from

referring to them.

Requests to change finished goods m

log is reviewed to ensure that all requtimeously.

Material master data remains pertinent. INV

2008

Material master file data does not remain pertinent.

Material master data no longer needed is not

deleted/archived from the system.

Material master file data is periodicall

accuracy and ongoing pertinence. M

for a significant period of time are rev

material master file remains up-to-dat

All changes to, and deletion of, finished goods




record is reviewed.

O INV

2009




periods. Changes to finished goods master data are

not reviewed by a senior member of staff. No

responsibility is assigned for regularly reviewing audit

trails of change information.

Recorded changes to finished goods

to authorised source documents by a

ensure that the correct changes were

generated using SAP (MM04).A list is

change, old and new values for fields

the change.

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OBJECTIVE

OBJECTIVE

CATEGORY

RISK

REFERENCE


(Internal A

ROAD AND RAIL WEIGHBRIDGES

Details of all commercial vehicles & train "wagons"

are entered into the weighbridge system on when

entering and exiting the mill.

O INV

2101

Details of commercial vehicles & wagons are not

entered into the weighbridge system on entering and

exiting the mill.

Security should ensure that all comme

entering and exiting the mill go via the

Out transaction in the weighbridge sys

should be situated at the entrance/ex

by-pass lane into/out of the mill. If the

should monitor the use of the by-pass

All relevant details of commercial vehicles and

wagons entering /exiting the Mill are recorded.

INV

2102

Relevant details of commercial vehicles and wagons

entering /exiting the Mill are not recorded.

There should be a standard system-g

weighbridge ticket on which all details

registration number, tonnage, time of

truck drivers name, train drivers name

wagons should be recorded.

The incoming and outgoing masses of vehicles

and wagons entering the mill are recorded.

O INV

2103

On entering and exiting the Mill, the mass of the vehicle

& wagons are not checked against the mass of the

invoiced / returned goods. Prescribed weighbridge

tolerance levels are not adhered to.

The mass of the product (Vehicle Out

automatically compared against the m

accompanying the product leaving the

set tolerance will be permitted to exit t

the tolerance should be reported to a

followed up by Security. Reasons ther

weighbridge ticket / OB (Occurrence B

by the investigating parties). Policies a

stipulating the prescribed tolerance le

procedures.The nature of the product being removed per the

accompanying documentation is verified.

O INV

2104

Type of product on vehicle & wagon has not been

verified to the invoiced product.

Security should verify the nature of pr

the description on the accompanying

etc), and should sign the documentat

Unauthorised removal of product or other goods. O INV

2105

Documentation authorising the removal of product

(Delivery notes, route rosters, etc) are used more than

once.

All documentation supporting / author

(delivery notes, weighbridge tickets, e

signed to prevent re-submission.No unauthorised goods leave or enter the mill

without the necessary authorisation and

documentation.

O INV

2106

Undeclared and unauthorised goods may be hidden in

vehicles and not detected.

Security should search trucks & trains

wagon) and all other vehicles on entry

goods, fire arms, cameras etc. Goods

be supported by the authorised releva

Weighbridge system data is valid. O INV

2107

Weighbridge masses and other data can be

overwritten.

The weighbridge system should be se

not be overridden by unauthorised sta

log book to record any "overrides" tha

senior person) to the changes made.

Reliance can be placed on the accuracy of the

mass-measurement devices.

O INV

2108

Weighbridge scale tests are not performed internally

resulting in incorrect mass readings.

Policies and procedures should exist

scale testing (including the way they s

unacceptable variances should be rep

corrected.

Mass-measurement calibrations are done in

conformance with statutory regulations.

O,C INV

2109

Weighbridge not calibrated by independent contractor

on a regular basis resulting in inter alia contravention of

government regulations.

Policies and procedures should exist

calibration intervals and the regulator

to be done every two years).

Adequate controls are in place when the

weighbridge system fails.

O INV

2110

Inadequate control when weighbridge fails. i.e. when

the computer system or weighbridge scale equipment

is down (manual tickets).

During a weighbridge failure, only urg

There should be adequate manual do

the computer or weighbridge system

calculated manually should be checke

correctness before entry or exit. A reg

and maintained to record all "off-line"

Weighbridge movements during system failures

are recorded.

INV

2111

Weighbridge movements during system failures are

not recorded.

All manual transactions should be cap

system as soon as the system is "up &

should agree the information captured

ensure accuracy and completeness o

Security are performing their duties diligently. O INV

2112

Security not performing duties diligently. Senior security officials should monit

they are performing their duties d

personnel should be done as a matte

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