ABC Co. Ltd. is a steel manufacturing company having its registered office in NOIDA (UP) and its main plant facilities at Raipur (CG) and several other plants at various locations in India. Company's business has increas

ABC Co. Ltd. is a steel manufacturing company having its registered office in NOIDA (UP) and its main plant facilities at Raipur (CG) and several other plants at various locations in India. Company's business has increased manifold in last two years. All purchases are centralized and orders are placed by the MD office and payments are also made by head office. It results in delays in ordering and delivery of goods and payments to suppliers and also resulting into delays in project completions. Company's main customers are Public Sector Undertakings. Timely supply of materials and execution of projects are critical not only to avoid cost and time overruns but to avoid huge penalties and fines. Therefore, now company wants to decentralize its processes and to get studied and evaluated all the processes. Company wants to get implemented sound internal control systems and risk management in its all-critical processes. Company's statutory auditors in their recent audit report, have raised serious concern that has caught attention of lenders and other stakeholders. Statutory Auditors have pointed out lack of segregation of duties, lack of periodical verification of assets and non-reconciliation of debtors and creditors, amongst other missing operational controls. Risk management relates to how an organization sets objectives, then identifies, analyses, and responds to those risks that could potentially impact its ability to realize its objectives. Management performs risk assessment activities as part of the ordinary course of business in each of these categories. Examples include strategic planning, marketing planning, capital planning, budgeting, hedging, and incentive pay out structure. Internal controls are measures, put in place by management to ensure reliability of financial reporting, promote efficiency and effectiveness in operations and compliance with laws. The objective of an internal audit is to evaluate compliance with company's laid down procedures, applicable laws, and international standards. Data and reports are reviewed to assure consistency and compliance. Thus, internal audit provides a value-added service to management and to the board of directors by detecting and correcting weaknesses in a process before external audits discover them. This can protect the organization from loss of reputation and regulatory fines. Company has engaged you, as an Internal Auditor. In the light of the above, answer the following questions: Narrate the key aspects you would examine to evaluate effectiveness and efficiency of internal controls.