Internal Audit Checklist of Dispatch of Goods

& Receipt of Material

DESPATCH OF GOODS ( FINISHED PRODUCTS)

Check that the plan for the despatch of finished products is received by the Despatch section clearly
indicating the Quantity/ location and the description of the material.

Examine the method and the procedure for the despatch of material to ensure that the despatches are
effected smoothly.

Check the despatch report prepared as at the end of the day to ensure that the despatches planned for
the day are in fact effected in totality.

Check the pending delivery / despatch status for a particular period (on a day to day basis). This
information can be maintained in the form of a report.

Ensure that there is a proper system to weigh the finished goods for despatch. The weighbridges
and the related equipment should always be properly maintained (including calibration of weighing
machines)

If the sales invoices are prepared at the despatch section check a few invoices spread over a period
to ensure that the invoices are prepared correctly as regards Rates / Excise duty / Sales Tax etc. Ensure
that a proper control is kept over the stationery of blank invoices. The sales invoices should be
authorized by a person duly authorized in writing in this behalf. Check that the Freight consignment
Notes are properly prepared.

Check that the consignment of finished goods once weighed and okayed at the despatch section are
checked for the necessary papers - Gate pass / Sales Invoice / Road permit / Freight Consignment No,
etc. at the exit gate by security or by a responsible person deputed in the sales despatch section.

Verify the status of transporter wise trucks provided against the trucks ordered. Also, ensure
that penalty for not providing the trucks is charged without exception.

Check that all the trucks being despatched are not being loaded less than the minimum weight agreed
for payment. If so, proper justification & approval should be reviewed.

Status of marine insurance, if any to be checked.

Check that all the transporters are approved transporters and their contract is approved by authorized
person from Head Office.

INWARD MATERIAL (GOODS)

Check that entry for the incoming material is made at the entry gate register.

Ensure that the weighment / Counting of the incoming material is made properly and correctly at
the receiving section .

Check that stamp / acknowledgement of the receipt of the incoming material is made on the back
side of Freight consignment Note . The remark should indicate the quantity (weight / number of
pieces etc.) of the material recorded at the receiving section along with condition(ok / damaged / wet
etc) in which material has been received.

The receiving section should maintain a record of all the incoming material received consignment
wise, clearly giving the date / No. of vehicle / Description of the material / Quantity etc. This record
can be maintained in the form of MIS report prepared on a daily basis.

QUALITY ASSURANCE

Check the procedure for the clearance of RM for use in the production

Ensure that the procedure for quality testing of raw material / finished goods is well documented in
the form of a quality manual.

Ensure and check that the raw material / finished goods once rejected are not subsequently cleared
under deviation. In special cases ensure that the approval under the deviation is duly approved.

Check the specification / laid down standards for the testing and clearance of the raw material
/ finished goods and ensure that the actual test result conform to the laid down specification.

When ever there is a change in the laid down specification ensure that the change is approved and
authorized in writing by an appropriate authority and that the change is incorporated in the manual of
specification.

Check the time taken at the quality assurance to clear the sample received for testing . The test
sample of raw material and finished goods should be cleared with in a short time.

Check the management level to which the Head of Quality Assurance reports- As a matter of fact in
order to ensure that the quality assurance function as an independent arm the quality assurance should
report to the Head of the Organization / Unit.

Ensure that the testing samples accepted / rejected are segregated and kept separately with proper
and clear marking . Ensure that the sample do not get mixed up.