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INTERNALAUDITCEMENTINDUSTRYCEMENTINDUSTRYBYCMAN.S.V.KRISHNARAO,PRACTICINGCOSTACCOUNTANT1INTERNALAUDIT–IN-CEMENTINDUSTRY�InternalauditfunctionhasvastscopeinCementindustrybeinginmanufacturingsectorandplayskeyroleinkeepingthewheels,alwayson.Theveryreasonforsayingthisoncontinuousbasisistheconstantreviewofbuiltin‘internalcontrols’intheconstantreviewofbuiltin‘internalcontrols’intheOrganizationneedsapatrol,justlikemanufacturingwheel,otherwiseendangerofrisk(fraud)haunts,duetodiversifiedactivitiesintheprocess.2INTERNALAUDIT–IN-CEMENTINDUSTRY(Contd…)�InternalauditfunctionhasvastscopeinCementindustrybeinginmanufacturingsectorandplayskeyroleinkeepingthewheels,alwayson.Theveryreasonforsayingthisoncontinuousbasisistheconstantreviewofbuiltin‘internalcontrols’intheOrganizationneedsapatrol,justlikemanufacturingwheel,otherwiseendangerofrisk(fraud)haunts,duewheel,otherwiseendangerofrisk(fraud)haunts,duetodiversifiedactivitiesintheprocess.�InternalauditinoverallCementIndustrymaybeatopictodiscussinoneorbelowtwohours,butitsconductingmaytakefewweeksasthescopeanddepthissuchtogiveatruevalueaddedReporttoaCompany.3INTERNALAUDIT–IN-CEMENTINDUSTRY(Contd…)�HoweverbeforetakinguptheauditassignmentletushavethefundamentalsandbasicknowledgeaboutCementmanufacturing,itsprocess,elementsofCostsetc..FEWFACTSABOUTCEMENT1.TYPESOFCEMENT-�OPC-ORDINARYPORTLANDCEMENT�PPC-PORTLANDPOZZLANACEMENT�SLAGCEMENTetcWITHDIFFERENTGRADESLIKE33,43,534INTERNALAUDIT–IN-CEMENTINDUSTRY(Contd…)2)FirstCementproducedbyRomansandGreekswithashmixandlime3)PortlandcementdevelopedbyEnglandinearly18century4)CementIndustryplaysavitalroleinIndian4)CementIndustryplaysavitalroleinIndianEconomy’sandGDPgrowth,directlyandindirectlythroughinfrastructure,manufacturingandeveryotherconnectedindustry.5)Trytonameanindustry/servicewherepresence/roleofCEMENTisNIL?5INTERNALAUDIT–IN-CEMENTINDUSTRY(Contd…)�JustbynameorCaption“INTERNALAUDIT-IN-CEMENTINDUSTRY”,letusnotjumptoaconclusionthatitisaroutineInternalauditoffewpagesReport,whichmayfinditsdestinationintoacoloredflatorotherfileortoaBin.coloredflatorotherfileortoaBin.�TheveryreasonisInternalAuditReportsareINMANYbynamelike(illustrativebutnotexhaust)6INTERNALAUDIT-IN-CEMENTINDUSTRY(Contd…)�InternalAuditreport-Generalcoverage�ProductionOperations-Controlaudit�ComplianceAudit�Processefficiencyaudit�Marketingaudit�Marketingaudit�Commercialaudit�Compliance/taskbasedaudit�Energyaudit�Proprietaryaudit�Balancesheetaudit�SystemAudit�Socialauditetc7INTERNALAUDIT-IN-CEMENTINDUSTRY(Contd…)�WhatevermaybethenameofInternalauditeachaudittaskhaveitsownscope,coverage,limitsandultimatelyobjectinitsDelivery.�NOneedtomentionthateveryInternalaudit�NOneedtomentionthateveryInternalaudit(Report)isaVALUEADDITIONNOTONLYtothemanagementbutalsototheALLOTHERRELEVANTSTAKEHOLDERSINCLUDINGGOVERNMENT,inonewayorother,sothat..aseparateSection138inCompaniesAct2013,hasbeeninserted.8INTERNALAUDIT-IN-CEMENTINDUSTRY(Contd…)FewareasofInternalauditinCementindustrybyanynamecitedaboveare:�Inventorymanagement-(Procurement-Stores-Purchase)Operations�Finance&AccountsFinance&Accounts�ProductionOperations-Controlaudit�Marketing&distribution�RawmaterialsProcurement-Liaisoning�Limestone/ShaleManagement-Inventory�Transportation�Alliedactivities-Environment,PollutionControl,CSRactivitiesetc9INTERNALAUDIT-CEME...