Internal Auditors’ Term of Reference (Draft)

The objective and scope of work of the engagement should at least include the following:

1.       To assist the organization in carrying out specific corporate governance responsibilities;

2.       To insure that:

a.        All the major risks throughout the organization have been identified.

b.      The risks identified have been addressed through implementation of internal controls.

c.       The internal controls are working effectively throughout the period under review.

d.      All the policies, procedures and instructions of the organization have been properly communicated and are being complied by the persons responsible.

e.      All the laws, regulations and statutory requirements are being understood and compiled by the persons responsible.

f.        All the agreements with third parties are complied with and commitments are fulfilled timely.

3.       To advise management on effective risk management for the systems and activities.

The scope work mainly included to cover the following areas:

• Finance & Accounts operations
• Operational Activities
• Human Resources activities
• General administrative function

The Engagement should be conducted on monthly basis, however the reports could be summited on quarterly basis.

Proposed Annual Audit Plan (Quarter-wise)

Below is the audit plan indicating the areas at least to be covered in each quarter. In addition, the internal auditors should also review follow up with their recommendations in the previous quarter audit.

Quarters	Areas	Corporate Governance Compliance	Laws & regulations compliance	Compliance with IAS
Quarter ending 30th Sep 2011	·     Funds received and their utilization ·     Fixed assets ·     Payroll ·     Revenue expenditures ·     Procurements ·     Contracts outsourced ·     Bank account ·     Petty cash ·     Administrative functions	CFO & Audit Committee / Directorship	Compliance with PPRA Rules and other relevant and applicable law and regulations.	Particular IFRS/IAS of area under audit if any
Quarter ending 31st December 2011	·     Funds received and their utilization ·     Revenue expenditures ·     Investments ·     Income from investments ·     Bank account ·     Petty cash ·     I.T System audit	CFO & Audit Committee / Directorship	Compliance with PPRA Rules and other relevant and applicable law and regulations.	Particular IFRS/IAS of area under audit if any
Quarter ending 31st March 2012	·     Funds received and their utilization ·     Fixed assets ·     Payroll ·     Revenue expenditures ·     Procurements ·     Contracts outsourced ·     Bank account ·     Petty cash ·     Administrative functions	CFO & Audit Committee / Directorship	Compliance with PPRA Rules and other relevant and applicable law and regulations.	Particular IFRS/IAS of area under audit if any
Quarter ending 30th June 2012	·     Funds received and their utilization ·     Revenue expenditures ·     Investments ·     Income from investments ·     Bank account ·     Petty cash ·     I.T System audit	CFO & Audit Committee / Directorship	Compliance with PPRA Rules and other relevant and applicable law and regulations.	Particular IFRS/IAS of area under audit if any

In addition to the areas mentioned above, Internal Auditor should also review:

Ø  various operational, financial and business risks facing the corporation and will give recommendations accordingly to minimize those risks.

Ø  the points which already  highlighted in previous reports and management action on the same.