This sample report summarizes an internal audit review of an organization's incentive compensation process. The report includes an executive summary, description of audit work performed, process maps of the audit area, and recommendations.
The main objectives of this review are to obtain an understanding of the key financial and administrative processes that are associated with incentive compensation and to evaluate the adequacy and effectiveness of the associated internal controls. The following key observations were noted during the review:
Capture of data used to calculate commissions is manual and prone to error.
Mid-quarter annual reviews increase likelihood of manual error. External sales representatives are not paid in a timely manner.
The split process for external representatives is manually intensive.