Unique Healthcare Ltd. is a radiological instruments manufacturing company in Northern India having its registered office and factories in New Delhi. Company deals in wide range of radiological instruments supplying its

CS Professional · Internal and Forensic Audit · PYQS · June 2026
Unique Healthcare Ltd. is a radiological instruments manufacturing company in Northern India having its registered office and factories in New Delhi. Company deals in wide range of radiological instruments supplying its products to private and public sector hospitals and healthcare centres. In recent past, due to increasing demand of the company's products, several new products have been added in its product line. Company's operations with new technology, sales turnover and customer base are increasing leaps and bounds. Company's Managing Director and CEO a Professional Entrepreneur, appreciates that an internal audit is an independent objective assurance and consulting activity to add-value and improve an organization's operations. It helps an organization in accomplishing its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. Considering potential of internal auditing, CEO Gupta has high expectations from internal audit activity. He believes that internal audit provides a value-added service to the management and to the board of directors by detecting and correcting weaknesses in a process before external audits discover them. This protects the organization from loss of reputation and regulatory fines. He believes that the objective of an Internal Audit is to evaluate compliance with procedures, applicable laws, regulations and international standards. Data and reports are reviewed to assure consistency and compliance. Currently, company has a small in-house team lead by an unqualified person for internal audit function guided by the company's statutory auditors. Now, company, realizing the benefits of sound internal control systems that ensure compliance with laws and regulations, enhancing efficiencies and minimizing losses, has decided to outsource the internal audit activity, instead of creating a new full-fledged internal audit department in the company. This would also help company avoid huge costs in managing and in-house internal audit department. You, a qualified Company Secretary practising mainly in internal auditing, have been approached by the MD. You have been offered the internal audit of the company for next three years. In your letter of appointment of internal auditor, in the scope of audit and in the terms of reference paragraphs, management has entrusted you to carry out a comprehensive review of all operations of the company and to evaluate and assess the existence, adequacy and effectiveness of internal controls therein, pointing out weaknesses if any in and suggesting measures to control them in an actionable manner. Apart from the above, company management has specifically mandated you to minimize non-compliance and penalties and also the adverse comments in statutory auditors' reports. With reference to the above, you as a Company Secretary are required to answer the following questions: With respect to internal auditing describe authority and responsibility of internal auditor.

Answer & Explanation:

Internal auditing is an independent, objective assurance and consulting activity designed to add-value and improve an organisation's operations. It helps an organisation in accomplishing its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. The Authority and Responsibility of internal auditing include the following:- To work with board and management to ensure that a system is in place which ensures that all major risks are identified and analyzed. Evaluate and provide reasonable assurance that risk management, control, and governance systems are functioning as intended and will enable the organisation's objectives and goals to be met. To plan, organize and carry out the internal audit function including the preparation of an audit plan which fulfils the responsibility of the department, scheduling and assigning work and estimating resource needs. Report risk management issues and internal controls deficiencies identified directly to the audit committee and provide recommendations for improving the organization's operations, in terms of both efficient and effective performance. Evaluation of information security and associated risk exposures. Evaluation of the organization's readiness in case of business interruption. Evaluation of regulatory compliance program with consultation from legal counsel. Maintain open communication with management and the audit committee. Team with other internal and external resources as appropriate. Engage in continuous education and staff development. To report to both the audit committee and management on the policies, programmed and activities of the department. Provide support to the company's anti-fraud programs. To coordinate coverage with the external auditors and ensure that each party is not only aware of the other's work but also well briefed on areas of concern. To review and report on the accuracy, timeliness and relevance of the financial and other information that is provided for management. To associate closely with management and keep knowledge up to date by being informed about all important occurrences and events affecting the business, as well as the changes that are made in business policies. To make recommendations on the systems and procedures being reviewed, report on the findings and recommendations and monitor management's response and implementation.

Topics: Internal Audit

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