This is the summary of controls tested in Legal a...
생성일: 2025년 6월 10일
질문
This is the summary of controls tested in Legal and statutory compliances area of Internal audit. This is prepared from a guidance note and the audit team added Remarks and suggestions sections based on audit. I want you to draft the section of Legal and statutory compliances in the internal audit report having areas of 1. description of Ideal process as per the guidance note 2. Observations with the sections a. Description of observation(You will generate this from remarks section) and b. Suggestions from suggestions section.
답변
Here is a draft of the Legal and Statutory Compliances section of the internal audit report based on the control testing summary image you provided:
Legal and Statutory Compliances
1. Ideal Process Description (As per Guidance Note)
The legal and statutory compliance framework is a cornerstone of governance. As per best practices outlined in the guidance note, the following key elements should constitute an ideal process:
- Defined Compliance Policy: The Board of Directors should approve and periodically review a comprehensive policy for compliance with legal and statutory obligations.
- Compliance Calendar: A documented calendar should be maintained by the legal team, outlining all applicable statutory requirements, along with due dates and responsible persons. This calendar should be reviewed and approved by the Board.
- Update Mechanism: The legal team must stay abreast of amendments to applicable laws and reflect changes in the compliance calendar accordingly.
- Legal Interpretation Protocol: Management should rely on expert legal opinions for the interpretation of statutes and incorporate these into financial and operational decisions.
- Response to Statutory Notices: A robust mechanism must exist to log, track, and ensure timely responses to all statutory communications.
- Legal Advice in Litigation: No litigation or statutory contest should be pursued without competent legal advice.
- Qualified Legal Support: Legal consultants or firms must be chosen through a diligent evaluation of their expertise, past performance, and relevance to the company’s needs.
2. Observations
a. Absence of a Formal Compliance Policy
Observation:
There is no compliance policy formulated by the company to guide and monitor adherence to legal and statutory requirements.
Suggestion:
The company should draft and implement a comprehensive compliance policy that outlines applicable legal requirements and the associated responsibilities.
b. Inadequate Tracking of Compliance Requirements
Observation:
While an Assistant Manager (Mr. Srinivas) is responsible for filing the necessary statutory returns, there is no formal tracker or compliance calendar maintained to ensure timely adherence to compliance obligations.
Suggestion:
Implement a compliance calendar (either physically or digitally) to document filing timelines and responsibilities, and review this calendar periodically with the Board.
c. Non-maintenance of Updated Compliance Calendar
Observation:
The legal team does not maintain an updated compliance calendar, nor is there a system in place to ensure that amendments to laws are reflected in the compliance plan.
Suggestion:
Adopt a structured compliance calendar that is reviewed and discussed periodically. Incorporate legal amendments through expert review and continuous calendar updates.
d. Absence of Documented Legal Interpretation Process
Observation:
Although there are no pending legal disputes as informed, there is no formal system to document legal opinions or confirm that interpretations provided by legal experts have been addressed.
Suggestion:
Legal counsel should provide written confirmations regarding ongoing litigations and expert interpretations. Maintain a record of legal opinions and how they were addressed.
e. Lack of Response Tracking for Statutory Notices
Observation:
There is no system for tracking or responding to statutory notices in a time-bound manner, although currently there are no such pending notices.
Suggestion:
Introduce a tracking mechanism for all statutory communications and ensure written confirmation of timely responses. Legal notices should be responded to as per statutory deadlines.
f. Risk of Inadequate Legal Defense
Observation:
There is a risk that cases may be contested without adequate legal advice, as no structured framework is in place to evaluate legal representation decisions.
Suggestion:
Ensure that all litigation actions are supported by documented legal advice. Legal counsel should provide written confirmation of representation and advice received.
g. Lack of Due Diligence in Hiring Legal Consultants
Observation:
The current process lacks documented evaluation criteria for hiring legal consultants or firms, which can lead to engagement of underqualified or unsuitable counsel.
Suggestion:
The Board should evaluate multiple legal firms based on relevant experience, industry knowledge, and reputation. Maintain a record of qualifications and due diligence outcomes for selected legal advisors.
Let me know if you want this in a downloadable format (Word or PDF) or incorporated into a larger internal audit report.
질문
This is the summary of controls tested in One area of Internal audit. This is prepared from a guidance note and the audit team added Remarks and suggestions sections based on audit. I want you to draft this area in the internal audit report having areas of 1. description of Ideal process as per the guidance note 2. Description of observation(You will generate this from remarks section) and a summarised Suggestion from suggestions section.
질문
This is the summary of controls tested in One area of Internal audit. This is prepared from a guidance note and the audit team added Remarks and suggestions sections based on audit. I want you to draft this area in the internal audit report having areas of 1. description of Ideal process as per the guidance note 2. Description of observation(You will generate this from remarks section) and a summarised Suggestion from suggestions section.