Group Audit Services

The Group Audit Services (GAS) department’s primary responsibility is to support the group’s commitment to strong corporate governance and sound internal control. While management is responsible for the development, implementation and monitoring of effective control systems, GAS assists management in fulfilling this commitment. This is done by evaluating the adequacy and effectiveness of controls to support management in its pursuit of sustainable achievement of business objectives, and includes the appraisal of performance measures, the reliability of management information, operational controls and the safeguarding of assets. An Internal Audit Charter, approved by the audit committee and conforming to the International Standards for the Professional Practice of Internal Auditing as defined by the Institute of Internal Auditors (IIA), determines the mission and scope of the function.

Although GAS is responsible to the Group Financial Director for administrative matters, GAS reports to the audit committee of the board of directors. The 17 staff members are responsible for the audits of all group operations:

• The head office and information system (IS) audit teams co-operate closely to provide internal audit services for the group’s head office operations. This includes financial areas, such as accounts payable and the large credit operations, as well as non-financial areas, including shopfitting and distribution centres. In addition, the IS audit team conducts technical reviews covering Foschinidata areas such as database administration and networks. The audit teams also make extensive use of technology, such as automated scanning and data interrogation tools to improve assurance reporting to management. In addition, auditors often become involved when new computer systems are developed to ensure that cost-effective controls are considered at both the system design stage (prior to implementation) and during the system implementation to reduce the risk of business interruption.
• Current store audit coverage is between 15% and 20% of group stores per year (approximately 25% of all stores’ turnover), but maximum leverage is obtained by ensuring that at least 85% of all the area managers experience a minimum of one audit every year. The audited store’s administrative performance can then be benchmarked against that of other stores in the same trading division. Store audit has developed a scoring system for store audit results that enables management to evaluate the administrative health of stores both within and across trading divisions. Given the geographic spread of stores, as far afield as Namibia and Botswana, the planning of visits is crucial in ensuring that the planned coverage is met. The experience and professionalism of the store auditors has contributed significantly to the success of the store audit team which regularly runs control workshops for field and store management.

GAS is committed to providing quality internal audit services at a competitive cost. This is done by measuring and monitoring audit productivity and other performance factors, and keeping abreast of international trends. Key initiatives to improve both efficiency and effectiveness are the increased automation of audit processes by implementing an electronic working papers system and providing internal auditors with a mobile work environment. The international audit and consulting firm PricewaterhouseCoopers (PwC) recently performed a quality assurance review of GAS. This review found the department to “generally conform” to all of the standards promulgated by the international IIA. This is the highest compliance rating that can be awarded. The report by PwC also found that the department compared favourably against the benchmarks set by the best international audit groups in the retail sector.