Sunny Electric Ltd. is a regional electricity supply company facing frequent power outages, billing discrepancies and high transmission losses. The management has asked the internal audit team to conduct an audit of the

In order to evaluate the operational efficiency of Sunny Electric Ltd. and review the effectiveness of internal controls in the Company, the following internal audit procedure is suggested: Analyze Transmission Loss Data: Review technical reports and compare actual losses against industry benchmarks. Test Meter Reading and Billing: Sample customer meters and invoices to verify accuracy and timely billing. Review Revenue Collection Process: Check for delays or discrepancies in cash collections and receivables aging. Inspect Maintenance Records: Verify preventive maintenance schedules and history of equipment failures. Compliance Checks: Examine documentation related to licenses, permits, and regulatory filings. Interview Operations Staff: Understand operational challenges and identify gaps in processes. Review the accounting records: Proper accounting should be done for arrears, revenue and capital expenditure.