Internal Audit Checklist of Production &

Planning Process
PRODUCTION

Verify the production records such as production slips / memos to ensure that the records are
properly maintained . Also verify the log books of machinery to check the details of production .
Check the production log books.

Check the budgeted production of all the products with the actual result on a monthly / annual
basis. Ascertain the reason for a shortfall in the production if any and comment upon it.

Check the production capacity utilization of all the production plants and enquire in to the
reasons for lower capacity utilization and comment upon it.

Check the system / procedure / method of recording the input and output.

Check whether the Input / Output Norms have been determined of each process of manufacture /
process loss/ wastage (Accounted) losses and the Unaccounted loss and gain.

Check format of the Input and Output statement and ensure that all the relevant data/information
related to the following are shown separately.
o Opening stocks of RM / WIP}.
o Closing stock of RM / WIP . } Total Input
o RM issued.

o Other material issued.

o Accounted losses various types (Norm v/s Actual)

o Finished goods (Norm v/s Actual )
o Unaccounted losses (Norm v/s Actual)

Check the production slips with the entries in the excise record (RG-1).

Comment upon the deviation in the norms set for Input / Output ie Norm v/s actual position.

Check the production schedules to verify whether the production has been carried out as per the
scheduled production.

Check the details in respect of yield - Budgeted yield v/s actual yield in respect of all the
products and enquire in to the reason for lower yield and comment upon it.

PRODUCTION PLANNING AND CONTROL

Study the system / method and the procedure of production planning and the procedure for
the preparation of weekly / monthly / annual production budgets.

Check the status of orders received from the Marketing Department for production of various
products.

Check the machine utilization status report and comment upon the idle time - reason thereof and the
steps to reduce idle time.

Ensure that the log book in respect of all the plant machinery and equipments are kept properly and
up to date. Verify the machine log books and comment on the discrepancies observed .

Check that there is a proper lay out for free flow of materials.

Ensure that the actual production is carried out as per Production Planning and comment upon the
deviation from the production planning figures.

Carry out a study of machine efficiency and utilization to ensure that the machine are utilized as
per the laid standards of efficiency and utilization.