Accounting Grade 12 Internal auditor report on procedures and internal controls in a public company Guide

You have been appointed as the internal auditor of Exotic Clothing Ltd, a new public company which is about to be established. All stock will be bought on credit. They will sell for cash and they will allow customers to buy on credit. It is expected that there will be approximately 1 000 shareholders. The CEO has asked you to prepare a report on certain procedures that should be put in place in the company

The company currently has four employees in the Accounting department. The CEO is thinking of appointing Tom to manage fixed assets, Maisy to control trading stock, Bheki to control debtors (accounts receivable) and Shamila to control cash resources.

Your report should include the following

1. Procedures to establish the company
2. The records that should be kept on each shareholder, together with the reasons why these are necessary
3. The procedures that should be put in place to ensure that good internal control is exercised over:
   • Fixed assets
   • Trading stock
   • Accounts receivable (debtors)
   • Cash collected

How do you write an internal audit report

10 Best Practices for Writing a Digestible Audit Report

​​​​​​Our Audit Management recommends 10 Best Practices for Writing a Digestible Audit Report, including:

1. Reference everything.
2. Include a reference section.
3. Use figures, visuals, and text stylization.
4. Contextualize the audit.
5. Include positive and negative findings.
6. Ensure every issue incorporates the five C’s of observations.
7. Include detailed observations.
8. Always perform a quality assurance check.
9. Avoid blame and state the facts.
10. Be as direct as possible.

In good writing, there always comes a good time to break the rules. If your audience needs a shorter report and you can’t incorporate all of these into your deliverable, don’t worry! As long as you’ve made an effort to tailor the report to your audience and have your detailed findings in your back pocket to support that report — you should be able to present your findings with confidence.