SUPERIOR UNIVERSITYMIS TERM PROJECT

TASK:ADUIT, FINANCE, ACCOUNTING SYSTEM OF OWN DEVELOPED

COMPANY.

SUBMITTED BY:LEADER 11338 11321

11315 11353 11316

SUBMITTED TO: SIR ZOHAIB SALEEM

PROGRAM: M.com 3-A

AUDIT & ASSURANCE

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TABLE OF CONTENTSTABLE OF CONTENTS

1. Introduction to field 3

2. Introduction to company 3

3. Structure 4

4. Employee hierarchy 5

5. System 7

6. Internal audit 11

7. System transparency 12

8. Conclusion 12

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INTRODUCTION TO FIELD

Pharmaceutical is basically the profession of health that links the health sciences with the chemical sciences and it is charged with ensuring the safe and effective use of medicines. The word Pharmacy is derived from Greek (pharmakon), meaning "drug" or "medicine".

The history of pharmacy as an independent science is relatively young. Until the birth of pharmacy as an independent science, there is a historical evolution from ancient times to the present day that marks the course of this science, always connected to the medicine. The pharmaceutical industry develops, produces, and markets drugs licensed for use as medications.

The scope of pharmacy practice includes more traditional roles such as compounding and dispensing medications, and it also includes more modern services related to health care, including clinical services, reviewing medications for safety and efficacy, and providing drug information. Pharmacists, therefore, are the experts on drug therapy and are the primary health professionals who optimize medication use to provide patients with positive health outcomes.

An establishment in which pharmacy (in the first sense) is practiced is called a pharmacy, chemist's or drug store. In the United States and Canada, drug stores commonly sell not only medicines, but also miscellaneous items such as candy (sweets), cosmetics, and magazines, as well as light refreshments or groceries.

In its investigation of herbal and chemical ingredients, the work of the pharma may be regarded as a originator of the modern sciences of chemistry and pharmacology, prior to the formulation of the scientific method.

INTRODUCTION TO COMPANY

Virtual pharmaceutical company (VPC) is a manufacturing based pharmaceutical company. Currently our business is running in Pakistan, focusing 5 Zones (Gujranwala, Lahore, Islamabad, Karachi and Peshawar) We produce pain killers & cough syrups. We have a challenging and inspiring mission: to improve the quality of human life by enabling people to do more, feel better and live longer. This mission gives us the purpose to develop innovative medicines and products that help millions of people around the world.

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ORGANIZATIONAL STRUCTURE

Head Office may include following departments:

Plant Raiwind Rd LHR + H.O

Sub Offices

GRW ISB KCH Peshawar

HEAD OFFICE

ADMIN DEPT

BOD

CEO

General Secretary

Managers

QA DEPT

CQA

Asst. QA

Member

MTO

Finance DEPT

CFO

Finance Manager

Asst. Finance Manager

MTO

Accounting Dept

Inventory Reports

Purchase

Sales

M.T.O

Internal Audit Dept

Senior auditor

Junior auditors

Members

MKT DEPT

Chief MKT

P.R. Manager

Advertising

M.T.O

Purchase DEPT

CPM

Asst .P.M

Junior PM

M.T.O

SALES DEPT

CSM

Asst .S.M

Junior SM

M.T.O

HRM Dept R & D

Dept

IT DEPT Inventory

Dept

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VPC has developed the above organizational structure in which there is only one Plant and Head office at Raiwind Road Lahore. Our sub offices will be at Gujranwala, Islamabad, Karachi and Peshawar. Whereas Head Office may include following department Admin, Quality Assurance Department, Finance Department, Accounting Department, Internal Audit Department, Marketing Department, Purchase Department, Sales Department, HRM Department, R& D Department, IT Department, Inventory Department hence all are interlinked with each other through WAN and our own developed Software (OGOR).

EMPLOYEE HIERARCHY

No. of employees in Finance

7 members

1 1 1 4

CFO Finance Manager Asst. Finance Manager MTO

No. of employees in internal audit department

5 members

1 1 3

Senior auditor Junior auditors Members

No. of employees in Accounting dept

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16 members

1 1 14

Accounts manager Assist. Accounts Manager MTO

Head of accounts 1 Head of accounts 2

1 1

Supervisor Supervisor

2 2 2 2 2 2

Purchase Sale Inventory Payroll Tax returns Payables and receivables

HRM 7 members Marketing 20 members Quality assurance department 5 members Search &development 50 members Sale department 12 members Purchase department 12 members Admin department 15 members Inventory dept 15 members IT department 10 members

SYSTEM

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ACCOUNTING DEPT

Our company’s accounting department will be consisting of;

16 computers 4 printers 4 scanners 3 offices (1 for accounts manager, 2nd for assistant manager and 3rd for remaining staff) The whole system will be connected through our company’s developed software (OGOR)

DATA FLOW OF ACCOUNTS DEPARTMENT:

EXPLANATION:

Reports of sales dept

Reports of purchase

dept.

Reports of other dept.

Reports of finance dept.

Assistant Accounts Manager

Accounts department

Accounts manager

SalesPurchase

Head of accounts 2

Head of accounts 1

Tax returnsPayrollInventory Payables and receivables

M.T.O’s M.T.O’s

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The above flow of accounting department shows that reports of sales, purchase, finance and other departments will be send to accounts department. Whereas under accounts department there will be two heads of account 1st will be dealing in sales, purchase and inventory by MTO’s while in 2nd heads of account will be dealing in payroll, tax returns, payables & receivables by MTO’s and reports will be send to Assistant Accounts Manager who after proof reading will send same to Accounts Manager.

FINANCE DEPT

Rejected reports

Report

Accepted Report

EXPLANATION:

Debtors

Budget decide

Allocation of finance

In d

Creditors Employees

Requisition Fill

Finance manager Accept/ Reject

Accepted list prepare

Allocate

Finance

CFO

CFO

Assist. Finance manager

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In the above flow CFO will decides or accepts or rejects budget for its allocation in different ways. For example the payment to the Creditors, employees in the form of salaries and payment of all other miscellaneous expenses etc depending on the need of the organization. As we know that finance is the life blood of the business, so ultimately all the decisions of all other departments are dependent on the finance department and everything is done under the policies made by the finance department. Whenever a request for the purchase of the raw material or payment of any expense comes, report is send by Assist. Finance manager to finance manger and then to CFO for acceptation of budget. After evaluating filled requisition if he accepts sent the same to finance manager and finance manager to Assist. Finance manager for further allocation and for rejected requisition process is revised.

AUDIT DEPT

Basically audit department task is to examine / check the books of account with evidence identify / detect errors & frauds, Verify assets and liabilities and provide suggestions for further improvement. Auditing is done approximately in all departments of a company but is closely related to accountancy. Therefore any changes and improvement in methods of accounting result in correspondence changing in techniques of auditing.In our company we have appointed auditors from our existing employees to perform internal audit so that mistakes and frauds should be identified as soon as possible as incurred in order to maintain and secure our Goodwill in the market.

ADMIN DEPTADMIN DEPT

QA DEPT

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Reports

EXPLANATION:

The above flow shows that all departments are reporting to audit department through software (OGOR). And in audit department members or team of auditors may check that reports through software on daily basis and sends the report to Junior manager and he after going through all the reports sends the same to Senior auditor who after proof reading sends the final report to Head office. Through this errors and frauds will be identified timely and rectified at the spot. And if company has purchased a new asset and then audit team will verify that asset by visiting it all vouchers will be verified by them after 15 days.

Senior auditors

Audit department

H.O

Junior auditors

Members

Verification of assets if any

QA DEPT

Finance DEPT

Accounting DEPT

MKT DEPT

Purchase DEPT

Sales DEPT

HR DEPT

R&D DEPT

IT DEPT Inventory DEPT

OGOR Software

REPORT

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INTERNAL AUDIT

The internal audit department is very important in every organization. It has become the essence of every organization as to know the true picture of the company is very important for the owners and investors too. It is a mean by which an organization's resources are directed, monitored, and measured. It helps in keeping the records of accounts and cash flows fairly. With the help of the internal audit department, many errors and frauds can be prevented. When an audit will be scheduled, an announcement letter will be sent to the responsible parties. An entrance meeting will be scheduled to discuss the objectives and scope of the audit. At the entrance meeting, any concerns or questions about the audit process are discussed.

An audit will comprise of four stages:

1. Planning2. Fieldwork 3. Reporting4. Follow-up

The audit team will collect data and document the procedures, controls and/or activities being reviewed. Based on our risk assessment, the audit team will perform various types of tests and conclude on the adequacy of the control system.

OBJECTIVE OF OUR INTERNAL CONTROL SYSTEM:

We have developed our own software which will work comprehensively covering all the department’s working. The software will be connected with the internet and all the departments will be inter-linked. The internal audit department will be having access to the accounts department too. They will be checking all the vouchers after 15 days of every sub-office. While daily report of all the transactions will be checked by the internal auditor everyday twice. The objectives of our internal audit department are:

1. Efficiency of the work2. Effectiveness of the work3. Consistency of the true picture of the company4. To eliminate the errors and frauds5. To reduce manual efforts6. Comprehensive information of the company7. To stabilize the system8. To help in making unqualified report by the continuous audit9. Reduce the burden of the accounts department

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SYSTEM TRANSPARENCY

DUE TO REPORT SYSTEM OF OUR COMPANY:

In every department and sub offices 2 reports in a day 1st report at 1 P.M 2nd report to the audit department Accounts department send report to the head department of accounts After verification final reports send to the audit department.

CONCLUSION:

Our company is manufacturing pharmaceutical company named as Virtual pharmaceutical company (VPC) manufacturing pain killers & cough syrups. It is running in Pakistan, focusing 5 Zones (Gujranwala, Lahore, Islamabad, Karachi and Peshawar). We have several departments which are already discussed in Organizational structure. Our main focus is on audit, finance and accounting department there system, working and transparency which are briefly discussed above.

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