ASOP Ltd is in business of trading & manufacturing of FMCG. turnover of company has been increasing, however, company has not been able to maintain its margins constant which are declining. internal auditors of company raised observations on sales schemes of company. As per SOP, all schemes are required to be approved by CEO of company. However, per process it was observed that all schemes were approved by Chief Sales & Marketing Officer (CSMO). Review of sample 89 support schemes for months of May 2018 & June 2018 highlighted that 19% (i.e. 17 schemes) were not approved by CSMO. Mgt. replied that there is a need for revision of SOP to reflect current paradigm. They shall amend SOP to reflect same. Please advise how should these matters be dealt by internal auditors?
I think answer should be C. Please confirm
A) Since Mgt. has agreed on observation of internal auditor, internal auditor should drop these points.
B) SOPs are not aligned to on-ground practices followed by concerned officials. SOPs should be updated & till then there should be a mechanism to follow existing SOP.
C) SOPs are not aligned to on-ground practices followed by concerned officials & same should be reported by internal auditor.
D) Internal auditor to look at materiality & basis that can ignore this as this will not have much impact.