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Client Name Date Completed:
Audit Questionnaire: Spare parts supply
Completed By:
Business Function: Manufacturing
Reviewed By:
Objective:
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
1.1
For every sales transaction a preset percentage of spare parts
(based on product history and quality), be set a side to ensure
that stocking levels of spare parts are accurately and cost
effectively determined in order to support anticipated demands.
1.2
Management review spare parts stock movement on a daily
basis to prevent either under or over-stocking of spare parts.
1.3
Management establishes minimum re-order levels (i.e. 500, 600
units) that are realistically set, based on past experience and
product quality, and effectively used to trigger the required (and
authorized) production or purchase.
1.4
Management monitors on a periodic basis the policy on
supplying components for discontinued products to prevent
accumulation of obsolete spares.
Complete this checklist and apply audit procedures prescribed in relevant audit program for the question client answered "YES", evaluate the internal controls
and report the observations along with recommendations (if any.), for the Questions answered "NO" report as ineffective based on relevance of the internal
control activity and regulations (e.g. SOX), etc.
1) Adequate and appropriate stocks of spare parts are maintained.
2) All stock issues/movements are accurately valued and valid. Spares used for warranty and other non-chargeable work are identified and costed.
3) Spares are produced or purchased in effective (cost) and efficient (time) manner. Costs associated with usage of spare parts are identified and accurately recorded.
6) All spare parts are used only for a valid purpose.
4) Chargeable spares are invoiced to customers at valid prices.
5) Persistent faults relating to components are accurately identified and rectified/resolved.
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
1.5
Accurate sales records are maintained to support decision
making about potential spare parts stock requirements.
Management periodically review sales data to ensure its
accuracy over time.
1.6
Management review its spare parts and supply process on a
regular basis to promptly detect and resolve potential design or
performance weaknesses.
1.8
Management review on a daily basis the movement of all stock
to ensure that such movements are valid, authorized and
correctly accounted for.
1.9
Spare part prices are analyzed to ensure that they are accurate
and appropriately valued in the accounts. In addition,
management conducts surprise counts to ensure that the stocks
actually exist.
The relevant stock records are subject to periodic and effective
verification, and management is provided with regular stock
status reports to avoid variances and anomalies.
2.3
Management authorize all production runs and purchase orders
(based on stock re-order levels) to optimized quantity and price
to ensure that uneconomic requests are avoided.
The costs associated with the usage of spare parts is reviewed
to ensure that they are accurately identified, accounted for, and
effectively monitored against expectations.
3.1
Prices at which spare parts can be charged to customers are
established and are reviewed periodically to ensure they cover
costs and maintain required margins. Management authorizes all
charges of spare parts to customers.
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
5.1
Components received from suppliers are thoroughly inspected
upon receipt and that faulty components are returned for
replacement or credit. As for components manufactured by an in-
house production function, such components undergo a
thorough quality control testing to ensure that persistent
component faults or problems are promptly identified, verified
and appropriately followed-up and rectified/resolved.
6.1
An approval of invoices is required to ensure that spare part
costs for chargeable (i.e. non-warranty) work are validated,
accounted for, and recovered from customers to prevent the
unauthorized or invalid usage of components.
6.2
Management has defined, documented and authorized a policy
governing the permitted use of spares. Management review the
movement of spare parts to ensure that the established policy is
fully complied with.
3.7
Appropriate personnel approve a material requisition slip
required for spare usages to prevent the unauthorized usage or
pilferage of spares. Management conduct surprise counts to
detect unauthorized use of spare parts.
3.8
Access to spare stocks and costing records is restricted to
prevent either unauthorized access to, or unauthorized
amendment of stock and costing records.
To the best of my knowledge, the answers
and comments noted above are accurate and
reflect the current internal controls within
this department:
Name and Title of Person Completing Form (please print)
Name and Title of Department Director (please print)
Signature of Department Director
Date of Department Director's Signature
Serial # Control Activities Yes No* Comments /Description
Employee Responsible for Task
Signature of Person Completing Form
10/3/2014
Date Form Completed