Operational Control / Major Major Process Sub Process Risk #

Financial Control Process No.

Operational Control 1.01 Budget Monitoring Budget allocation and Medium

monitoring process

Financial control 1.02 Budget Monitoring Budget allocation and Medium

monitoring process
Financial control 1.03 Budget Monitoring Budget allocation and Medium
monitoring process

Financial control 2.01 Review of capital Approval of capital High

proposal proposal
Financial control 3.01 Creation of Purchase Budget code creation High
Orders

Financial control 3.02 Creation of Purchase Purchase requisition High

Orders creation & approvals

Financial control 3.03 Creation of Purchase Purchase requisition Medium

Orders creation & approvals
Operational Control 3.04 Creation of Purchase Request for Quotation and Medium
Orders Comparative quotation
analysis
 Financial control 3.05 Creation of Purchase Purchase Order creation & Medium
Orders Approvals

Financial control 3.06 Creation of Purchase Purchase Order creation & Medium
Orders Approvals

Financial control 4.01 Review of CWIP CWIP Medium

Financial control 5.02 Review of Capitalization Capitalization Medium

Financial control 5.03 Review of Capitalization Capitalization Medium

Financial control 5.04 Review of Capitalization Capitalization Medium

Financial control 5.05 Review of Capitalization Capitalization Medium

Operational Control 5.06 Review of Capitalization Capitalization Low

Financial control 6.01 Title documents Title documents Medium

Financial control 7.01 Warranty and Guarantee Warranty and Guarantee Low

Financial control 8.01 Review of Fixed Asset Fixed Asset Register Medium
register

Financial control 8.02 Review of Fixed Asset Fixed Asset Register Medium
register

Financial control 8.03 Review of Fixed Asset Fixed Asset Register Medium
register

Financial control 9.01 Review of Depreciation Depreciation Medium

calculation

Financial control 9.02 Review of Depreciation Master Creation Medium

calculation

Financial control 9.03 Review of Depreciation Depreciation Medium

calculation

Financial control 9.04 Review of Depreciation Depreciation Medium

calculation

Financial control 10.01 Review of Sale of Assets sale of assets Medium

 Financial control 10.02 Review of Sale of Assets sale of assets Medium

Financial control 10.03 Review of Sale of Assets sale of assets Medium

Financial control 11.01 Review of Transfer of Transfer of assets Medium

Assets

Financial control 12.01 Review of Idle Assets Disposal Medium

Operational Control 12.02 Review of Idle Assets Disposal Medium

Operational Control 12.03 Review of Idle Assets Disposal Medium

Financial control 13.01 Physical Verification Physical Verification Medium

procedure

Operational Control 14.01 Insurance Insurance Medium

Financial control 15.01 Tagging of Assets Tagging Medium

Operational Control 16.01 Review of Post Post Implementation Medium

Implementation Reviews

Financial control 17.01 Review of Impairment Impairment Loss Medium

Loss

Financial control 18.01 Foreign currency Foreign currency Medium

transaction accounting transaction accounting
Financial control 19.01 Disclosure requirement Disclosure Medium
 Risk Description Control #
(What Can Go Wrong)

Delay in budget preparation due to delay in FA.01

receipt of budget inputs from the user
departments.

DOA not followed for the budget approval. FA.02

Budget is not monitored regularly resulting in FA.03

delay of project and actual spending may not
map up to the budgeted figure.

Capital Proposal (CP) is not approved as per DOA FA.04

Unauthorized budget code creation/ wrong FA.05

amount entered against the budget code

Purchase requisition for Repairs & Main made FA.06

against capex budget code.

Unauthorized PR and subsequently FA.07

unauthorized purchases
Purchase made at higher/ uncompetitive rates. FA.08
Unauthorized procurement. FA.09

Non-restriction in system for raising of PR over FA.10

budget could lead to excess expenditure over
budget.

Capital Work in progress (CWIP) is not FA.11

transferred to fixed assets when the asset is
placed into put to use.

Interest Capitalization FA.12

Non tracking of trial run expenses leading to FA.13

inaccurate accounting system

Incorrect estimation of Useful life of assets FA.14

impacting depreciation

Open Budget codes leading to possibility of FA.15

posting the costs of other project

Non compliance of policy FA.16

Absence of title documents impacting ownership FA.17
proofs

Benefit of Warranty/Guarantee not claimed FA.18

leading to excess cost

Addition/ deletion of assets may not be FA.19

detected in a timely manner so as to reflect the
actual position in the financials

Un-reconciled differences in the books of FA.20

accounts not reflecting the actual position in the
financials

Fixed asset register is not monitored on a FA.21

periodical basis, Incorrect updation to the FAR,
Incorrect accounting and non-compliance of
Schedule-VI of Companies Act

Incorrect Classification of the Fixed Asset leading FA.22

to Incorrect depreciation calculation.

Incorrect updation of Depreciation key leading FA.23

to short/Higher depreciation.

Depreciation rates are wrongly entered in the FA.24

fixed asset register.

Undervaluation/ Overvaluation of assets in the FA.25

system

Unauthorized sale of fixed asset. FA.26

Incorrect and unauthorized accounting for FA.27
sale/disposal of fixed assets.

Incorrect asset disposal accounting impacting FA.28

balances
Unauthorized transfer of assets FA.29

Blockage of funds and unused assets FA.30

Alternate use not identified leading additional FA.31

cost of new asset

Misappropriation of assets FA.32

Misappropriation of assets FA.33

Uninsured assets FA.34

Non-tagging could lead to difficulty in FA.35

traceability and reconciliation of assets .

Due to absence of cost benefit tracking, benefits FA.36

derived cannot be identified.

Impairment testing is not carried out for all FA.37

intangible/tangible assets existing or additions
made during the period

Incorrect accounting FA.38

Non-compliance of Accounting Standards FA.39
 Control Description Risk Risk of material Risk of Fraud
(Primary Business) Heat (F) misstatement (Yes, No) (Yes, No)

CFD sends periodic intimation to respective locations in R.1 No No

December month for the timely input of data for the
project and budgeting (P&B). Based on the previous year
budget and discussion with JP F&C the HOD- accounts
makes P&B and sends an email to CFD before Feb end.

Chairman approves the final P&B on the R.2 No No

recommendation of MD/DMD/BH.
Accounts department extracts the system report every R.3 No No
month and reviews the status of the project, identifies
the delay and progress of the project. Based on the
project owners approval the total budget is sub divided
into different budget and code is created against the
same. Budget is deducted at the time of PR level and
differential amount is deducted at PO level.

There is a DOA for CP approval. F&A department ensures R.4 No No

that the CP is approved as per the DOA.
Based on the approved capital proposal, accounts R.5 Yes No
department create the budget codes (for material &
services) and budget amount in the oracle system.
Based on the approved capital proposal, accounts R.6 No No
department create the budget codes (for material &
services) and budget amount in the oracle system. After
the budget codes are made active in the oracle, user
department can raise the purchase requisitions against
the budget codes.

For purchase of fixed asset all the PR has to be approved R.7 No No

in the oracle system as per DOA
Purchase department prepares a Capital Proposal R.8 No No
Approval Note (CPAN) for every Capex, containing the
details of the vendor quoted, CQA-techno-commercial
analysis which is reviewed and signed as per the DOA.
PO is raised into the system against a PR. PR cannot be R.9 No No
created without the Budget Code which is created for
every purchase of the Fixed Asset. The Budget code is
created by the accounts department.

There is a system check to restrict the purchases of the R.10 No No

asset more than its budget amount.(up to tolerance it is
allowed)
In case of purchases above the approved budget,
approval of the GEP is taken for the purchase as per the
defined DOA.
Purchase department prepares a Capital Asset Proposal
note (C PAN) which contains the details of the approved
budget, Amount already sent and the balance unutilized
amount which requires approval as per the DOA.

On Monthly basis Accounts department reviews the R.11 No No

status of the current work in progress and future
projects to be executed from the CWIP Account.(old
cases reasons are maintained)
Project cases:
Capital work in progress is capitalized by the accounts
Department only when it receives the "Put to use"
certificate from the various department approved by the
head of the respective department. The JV is reviewed
with Commissioning Certificate for before approval and
the posting in the ledger.capitalisation date is the put to
use date.
Bought out Item:
Material issue voucher date is the capitalization date(No
certificate is required)

The accounts department calculates the interest cost R.13 No No

manually and prepares a JV for the same. The approver
of the JV reviews the working of the interest cost
calculation and approves the JV.

Trial run expenses is tracked and capitalised for expenses R.14 Yes No
incurred up to Commercial production and
documentation of trail run reports is ensured.
Useful life of assets is updated in the system manually R.15 Yes No
category wise by accounts department based on defined
guidelines in schedule 2 and Ind AS
Post completion of the Project, closure of all PR, PO and R.16 Yes Yes
invoice booking is ensured and project is closed in the
System Manually.
Asset below Rs. 5000/- is charged to Revenue Or 100% R.17 No No
depreciated.
Title documents for the land are maintained with Legal R.18 No No
team and reconciled with books of accounts on annual
basis.
Warranty / guarantee documents and the User Manuals R.19 No No
are obtained and maintained in safe custody by
respective User department.
Physical verification is done on quarterly basis based on R.20 Yes Yes
the annual physical verification plan and the total fixed
assets are covered once in a 2 year period. A
reconciliation statement is prepared by the accounts for
reconciling the quantity of the fixed asset as per the
fixed asset register and actuals.

Adjustment entries are passed in the accounting books R.21 Yes No

in case if any differences are found out as a result of the
physical verification procedure. The adjustment entry is
prepared by the accounts department and entry is
reviewed along with the supporting as per DOA.

The Access to Fixed assets module is restricted to R.22 Yes No

Accounts officer and his HOD.Manual approval is
available for the changes made in the fixed asset
register.

The classification of asset is done at the time of budget R.23 Yes No

code creation. Budget code is the combination of
company,location,activity,GL and sub account
Depreciation key creation is with Accounts department R.24 No No
and restricted to appropriate authority. However editing
rights is only with Accounts HOD

The depreciation rates are manually updated into the R.25 Yes No
fixed asset register by the accounts department which is
cross verified by HOD accounts.

At month end depreciation run needs to be done in the R.26 Yes No

system to calculate the depreciation. A JV is prepared by
the accounts department for the depreciation of the
month and then it is posted into the general ledger.

Request for Asset disposal form needs to be prepared R.27 Yes No

and manually approved as per DOA. All the asset that
need to be disposed off has to be routed through the
retirement process.
On the basis of the approved Request for Asset disposal
form , accounts department prepares the JV for sale of
assets and same is approved as per DOA before the JV is
posted into the general ledger.
The entries for the sale and disposal of the fixed asset is R.28 Yes No
done at the time of sale by the authorised person from
accounts department in fixed assets module in the
system. The entry is reviewed by HOD of the Finance and
Accounts.

On disposal of asset, profit or loss on sale of asset is R.29 Yes No

identified and accounted in the books.
A request for Asset transfer form is filled by the R.30 No No
transferor location duly signed as per the DOA. A mail is
communicated from the unit in the which the asset is to
be transferred. For accounting the same the JV that is
passed for the same is approved as per the DOA.
closing WDV is equal to opening WDV

Idle/obsolete assets/assets to be retired/ disposed are R.31 No No

identified on a periodic basis.

Based on the list, alternate use of such assets/transfer of R.32 No No

assets to other Units is explored before disposal.

Assets are disposed of in the presence of the R.33 No No

Independent person such as from Accounts/finance
team.
Written confirmations are obtained sent to repairs(RGP) R.33 No No
cases but FA outside company premises or sent to third
parties (including with employees), is not obtained.

Review of Insurance coverage is conducted periodically R.34 No No

based on the defined methodology to ensure adequate
coverage of all movable fixed assets.

For IT assets tagging is done. Other assets tagging is not R.35 No No

done

There is a process of post project review i.e cost benefits R.36 No No

analysis of capital expenditure more than 1 crore.

At the end of each reporting period, the carrying R.37 Yes No

amounts of assets is determined for impairment loss if
any and is accounted accordingly. Report on impairment
is documented.

The value of tangible assets purchased/sold in foreign R.38 Yes No

currency is recognized at the foreign exchange rate on
the date of transaction and as per the defined policies.
Disclosures with respect to Fixed assets are made in the R.39 Yes No
Financial Statements w.r.t. method of accounting for
owned/leased/hire-purchase, constructed assets,
valuation, revaluation, impairment, sale/disposal,
depreciation, capital commitments etc. is followed.
 ASSERTIONS
Control Evidence
Existence Valuation Presenta
Rights/
/ Complet / tion/
Obligatio
Occurren eness Allocatio Disclosur
ns
ce n e

Email of P&B guidelines and P&B

sent to CFD

x x Approved budget copy

x x Monthly budget monitoring file

x x DOA & Approved Capital

proposal(CP)
x x Budget code and Approved CP

x Screen shot restricting PR without

Budget code

x x Screen shot of PR Release process

Approved CPAN
x Screen shot restricting PR without
Budget code

x x Capex Proposal, Budget code

created in the system, Approved
CPAN

x x x Capital Work in Progress report

x x Interest cost calculation

x x Tracker of trial run expenses

x x Fixed Asset register

x x screenshot of project closure

Fixed Assets addition list

x x Title documents and Fixed Asset
Register

x x warranty/guarantee tracker

x x Annual physical verification plan,

Physical verification documents

x x Physical verification report,

Adjustment entries for differences
identified

x Manual approval for changes made

in the fixed asset, log report

x Details of Chart of Accounts

x x Responsibility Chart

x x Fixed Asset register

x x Screen shot of depreciation Run

x x Approved request for asset disposal

x x Screenshot of sale entries

x x Screenshot of sale entries

x x transfer note approval

x x Communication with department

on identification of idle assets, list of
idle assets identified.
Document of idle assets

List of assets disposed

x x Written confirmation document

Insurance Documents

x x Fixed assets register, asset tagging

list

Post Project Review Report

x x x Impairment loss working

x x x list of fixed assets added during the

year (import), Bill of Entry
x x x Annual Report
Document Type(Hard/soft copy) Frequency of Control Control Method Supporting IT
(Manual / Applications and/or
Automated / IT System
Dependent)

Soft copy Yearly Manual NA

Soft copy Yearly Manual NA

Soft copy Monthly Manual NA

Soft copy Event Based Manual NA

Hard Copy Event Based Manual oracle

Soft copy Event Based Automated oracle

Soft copy Event Based Automated oracle

Hard Copy Event Based Manual oracle

Soft copy Event Based Automated oracle

Hard Copy Event Based Manual NA

Soft copy Monthly Manual NA

NA Event Based Manual NA

NA Event Based Manual NA

Soft copy Event Based Manual NA

Soft copy Event Based Manual NA

Soft copy Event Based Manual NA

Hard copy Event Based Manual NA

Soft copy Event Based Manual NA

Hard Copy Quarterly Manual NA

Hard Copy Event Based Manual NA

Hard Copy Event Based Manual NA

Soft copy Event Based Manual NA

Soft copy Event Based Manual NA

Hard Copy Event Based Manual NA

Soft copy Event Based Automated NA

Hard Copy Event Based Manual NA

Hard Copy Event Based Manual NA

Soft copy Event Based Manual NA

NA Event Based Manual NA

Soft copy Event Based Manual NA

Soft copy Event Based Manual NA

NA Event Based Manual NA

NA Event Based Manual NA

Soft copy Event Based Manual na

Soft copy Event Based Manual NA

Soft copy Event Based Manual NA

Soft copy Event Based Manual NA

Hard Copy Event Based Manual NA

Hard Copy Yearly Manual NA
 CONTROL DESIGN EFFECTIVENESS OE Testing
Result
Control Nature Key Status Design Gap Description Design Gap Testing Results
(Preventive, Control? Ref #
Detective) (Yes, No,
N/A)

preventive no Control Exists Effective

preventive no Control Exists Effective

Detective yes Control Exists Effective

preventive yes Control Exists Effective

preventive yes Control Exists Effective

preventive No Control Exists Effective

preventive No Control Exists Effective

preventive No Control Exists Effective

preventive No Control Exists Effective

preventive no Control Exists Effective

preventive no Control Exists Effective

preventive no Control Exists Effective

preventive no Control Exists NA

preventive no Control Exists Effective

preventive no Control Exists Effective

preventive no Control Exists Effective

preventive yes Control Exists Effective

preventive no Control Exists Ineffective

preventive yes Control Exists Effective

preventive no Control Exists Effective

preventive no Control Exists Ineffective

preventive no Control Exists Effective

preventive yes Control Exists Effective

preventive yes Control Exists Effective

preventive yes Control Exists Effective

preventive yes Control Exists Effective

preventive yes Control Exists Effective

preventive yes Control Exists Effective

preventive yes Control Exists NA

preventive yes Control Exists Effective

preventive yes Control Exists Effective

preventive yes Control Exists NA

preventive yes Control Exists Ineffective

preventive no Control Exists Effective

preventive yes Design Gap Except for IT assets other

moveable assets are not
tagged.
preventive yes Control Exists Effective

preventive yes Control Exists Effective

preventive No Control Exists Effective

preventive No Control Exists Effective
Explanation of Ineffectiveness Reference
No tracker maintained for tracking the
warranty/guarantee

No Manual approval for changes made in the fixed asset

module
No written Confirmation on periodic basis are obtained
for Fixed assets outside company premises and for assets
given to employees
Mitigation Plan Target date
Tagging will be done progressively for all movable assets 30-Jun-16