SUMMER INTERNSHIP REPORT 2013

ASAD HABIB
2015-11-0181
KPMG Taseer Hadi & Co
3 rd June-15 th July13
Department- Audit
Lahore - Pakistan

Contents
1. Note on Audit Firm
1.1. History
1.2. Services Provided
1.3. International Affiliations
1.4. Major Clients (local)
1.5. Specializations
2. Note on Naseeb Online Services (Pvt) LTD Client
2.1. History
2.2. Lines of business; Products and services
2.3. Ownership structure
2.4. Organization Chart
2.5. Industry Analysis
2.6. Associated Concerns
2.7. Major Revenues & Expenses
2.8. Market Position & Future Prospects
3. Audit Methodology
4. Application of IT in Audit
5. Note on Areas Assigned
5.1.
5.2.
5.3.
5.4.

Audit Plan
Steps performed by you individually
Problems observed & Solutions
Sampling Technique

6. A note summarizing your experience with the audit firm highlighting

lessons learned in the field of
6.1.
6.2.
6.3.
6.4.
6.5.

Management skills
Interpersonal skills
Presentation skills
Organization behavior
Time management skills

7. Other relevant and interesting learning opportunities that came

across during the internship.

1. Note on Audit Firm

1.1.

History

Among the leading big four international audit firms, the KPMG network was formed in
1987 when Peat Marwick International and Klynveld Main Goerdeler merged along with their
respective member firms. Four key figures were involved in the formation of KPMG who are
accredited to be the founding members of the present organization. The organization's

background has also been traced through the names of its principal founding members - whose
initials form the name "KPMG."

K stands for Klynveld. Piet Klynveld founded the accounting firm Klynveld

Kraayenhof & Co. in Amsterdam in 1917.

P is for Peat. William Barclay Peat founded the accounting firm William Barclay

Peat & Co. in London in 1870.

M stands for Marwick. James Marwick founded the accounting firm Marwick,

Mitchell & Co. with Roger Mitchell in New York City in 1897.
G is for Goerdeler. Dr. Reinhard Goerdeler was for many years chairman of
Deutsche Treuhand-Gesellschaft and later chairman of KPMG. He is credited
with laying much of the groundwork for the KMG merger.

In 1911, William Barclay Peat & Co. and Marwick Mitchell & Co. joined forces to form what
would later be known as Peat Marwick International (PMI), a worldwide network of accounting
and consulting firms. Later, in 1979, Klynveld joined forces with Deutsche TreuhandGesellschaft and the international professional services firm McLintock Main Lafrentz to form
Klynveld Main Goerdeler (KMG). In 1987, PMI and KMG and their member firms joined
forces. Today, all member firms throughout the world carry the KPMG name exclusively or
include it in their national firm names.
KPMG in Pakistan was established in 1969 and is represented by KPMG Taseer Hadi &
Co. (KPMGTH). It is operating in 3 major cities across the country with offices in Karachi,
Lahore and Islamabad and has 28 Partners, 2 Executive Directors and more than 1100
professional staff. It is a member firm of KPMG International and of the cohesive business unit
that serves the Middle East and South Asia (KPMG's MESA business unit) in response to an
environment requiring the resources of a globally aligned organization combined with detailed
knowledge of local laws, regulations, markets and competition.

1.2.

Services Provided

KPMG deals mainly with audit, tax & advisory services. It is providing its several clients
with services such as statutory auditing, risk advisory, business and personal tax planning,

financial and attestation reporting, and strategic management services. KPMG has four main
service lines:

Assurance: comprises Financial Audit (core assurance), Fraud Investigation &

Dispute Services and Climate Change & Sustainability Services.

Advisory Services: consisting of four subservice lines: Actuarial, IT Risk and

Assurance, Risk, and Performance Improvement.

Tax Services: includes Business Tax Compliance, Human Capital, Indirect Tax,
International Tax Services, Tax Accounting & Risk Advisory Services, and

Transaction Tax.
Transaction Advisory Services (TAS): includes commercial, financial, real estate
and tax due diligence, mergers & acquisitions, valuation & business modeling,
corporate restructuring and integration services

Additionally, it provides mergers and acquisition, divestment, private placement,

restructuring, valuation and litigation advisory services. The company caters to financial
services, banking, communication, entertainment, healthcare, transportation, food and beverage,
and automotive industries.

1.3.

International Affiliations

Internationally, KPMG is a global network of professional firms providing Audit, Tax and
Advisory services where the affairs of KPMG are the responsibility of several bodies. Member
firms can be found in 156 countries and territories that have collectively employed more than
152,000 people across a range of disciplines working around the world. The independent
member firms of the KPMG network are affiliated with KPMG International Cooperative
("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity
and describes itself as such. Member firms' clients include business corporations, governments
and public sector agencies and not-for-profit organizations. They look to KPMG for a consistent
standard of service based on high order professional capabilities, industry insight and local
knowledge.
KPMGs Global Board is the principal governance and oversight body. The key
responsibilities of the Board include approving long-term strategy, protecting and enhancing the

KPMG brand, and approving policies and regulations. The Board includes the Chairman, and the
Chairman of each of our three regions (the Americas; Asia Pacific; and Europe, Middle East &
Africa).

1.4.

Major Clients (local)

In Pakistan KPMG has been serving a number of multinational companies and several
other local organizations of various kinds from both private and public sector. KPMG Pakistan
has been offering these organizations a huge pool of their services like external and internal
audit, risk advisory, Enterprise Resource Planning (ERP) and the like. Some of its major local
clients are

Nestle
Pepsi
Total Parco
Presson descon

1.5.

Tariq Glass Limited

Azgard9
Standard Chartered Bank
BERGER Paints
DG Cement
Wateen telecom
Rafhan
OGDCL (Oil & Gas Development Company)
FCCL (Fouji Cement Company Limited)
KOHAT Cement
Sui Southern Gas Company
CYAN Limited
Treat Corporation Limited
Fauji Fertilizer
Kohinoor Maple Leaf Group
Fauji Fertilizer Company

Specializations

KPMG specializes in providing its services in three main areas namely audit, taxation and
advisory. Considering the audit specialization, KPMG offers an independent audit of financial
statements that is one of the foundations for the effective operation of the capital markets. At
KPMG, audit quality is always considered vital for maintaining trust in the financial reporting
process and the integrity of financial information. Secondly, being a specialist in taxation,
KPMG provides effective and efficient tax services to its many clients in order to provide them a
competitive advantage by lowering the tax and administrative costs yet keeping their business
compliant with the tax laws and regulations. Thirdly being advisory specialists, KPMG
professionals are approached by many big and even smaller businesses and organizations where
clients are advised to tackle challenges in transactions and restructuring, performance and
technology and risk and compliance.
Moreover, KPMGs specialization in certain other areas like providing clients with
Climate Change and Sustainability-related service offerings comes based on its high levels of
experience and thought leadership, both within the Pakistani firms and across our global
network. Its focus is on providing its clients with progressive service offerings that are tailored to

their requirements based on their demography, sector, and client-specific issues. The principles,
standards, guidelines, methodologies and tools used to provide these specialized services are
globally accepted, tested over time, and are updated on a continual stakeholder feedback process.

2. Note on Naseeb Online Services (Pvt) LTD Client

2.1.

History
On joining KPMG Taseer Hadi & Co. i was allotted a private limited company

known as Naseeb Online Services. Naseeb Online Services (Private) Limited (the "Company")
was incorporated in Pakistan as a private limited company on 5th March, 2008 under the
Companies Ordinance, 1984. The registered office of the Company is situated at 46 B-II, Main
Gulberg, Lahore. The Company is a subsidiary of Naseeb Networks Inc. USA (the "Parent
Company") and is engaged in the business of online services. The Company is engaged in
providing support and quality assurance to its Pakistani and overseas customers and constantly
upgrading and maintaining the software. It also provides space on its online properties to
organizations wanting to advertise their brand or their products. It enjoys a leadership position in
its target markets including online recruitment (www.rozee.pk), social networking
(www.naseeb.com) and classifieds related services for Pakistan and its associated Diaspora
community. It has a team of young qualified professionals working in different segments of the
business, maintaining an excellent work environment, that any employee desires for.

2.2.

Lines of business; Products and services

Product portfolio of Naseeb Online Services consists of five main products comprising of
Rozee.pk that deals in jobs, Basti.pk dealing in property, Naksha.pk dealing in maps,
Naseeb.com dealing in matrimonial and Courseguru.pk dealing in courses offered online.
Among these 5 products offered by Naseeb Online Services, Rozee.pk is the only one
established on a wider scale that is representing the market share and revenues of the company.
Others are either on development stage or have a very low market. Thus during audit of Naseeb
Online Services (Pvt) LTD major focus of my audit team was on this one established brand
(Rozee.pk).

Rozee.pk is Pakistan's number one online job site which connects talent with
opportunity. Rozee.pk provides services to the job seekers and employers by providing them one
platform for job searching and hiring, respectively. ROZEE.PK has a huge database of thousands
of searchable CVs and has catered to more than 60,582 employers. It provides the employers
with 6 main products that are:
1. Premium Select: Premium select jobs are the most powerful job listings on Pakistan's
#1 job site. Premium select jobs are reserved for top jobs from the employers and
include ROZEE.PK's assisted hiring services. ROZEE.PK's team of specialists

short list the best candidates for the position, being advertised, from the
candidates received and conduct preliminary phone screening to establish up to
date credentials as well as interest for your particular job opportunity. This
service reduces one of the most time consuming aspects of the recruiting process.
2. Top Jobs: the jobs opening get star prominence on the website. The jobs and
company Logo are displayed prominently on front page that helps increase
candidate response up to three times more than standard job postings
3. Featured Jobs: these jobs offer excellent ROI for cost conscious small
enterprises. By making a job featured, employer can access all CVs from
applicant pool. Featured Job reduces an employers cost to hire and time frame
dramatically.
4. CV Search Engine: this feature allows scanning through the available CVs in
ROZEE.PKs database to find the best match for any job. a CV Search Credit
give employers authorization to download CVs from within ROZEE.PK
complete Candidate Pool that they identify as a potential hire. Advanced search
options and Google like scan technology gives more accuracy in finding the right
person for the job in seconds.
5. Top Employer: these packages are designed to give a magnetic branding with a
large company logo on ROZEE.PKs front page. Top Employer offers most
powerful recruitment tools With access to Unlimited Job Postings, Virtually
Unlimited access to all CVs in ROZEE.PK database and ERP-like recruitment
tools, Top Employer package is an unmatched recruitment solution. Top
Employer comes in Platinum, Gold, Silver and Bronze packages and includes

ROZEE.PK's entire product line from TOP Jobs to Power Tools at discounted
rates.
6. Career Portal: With Rozee.pks career portal a custom built career website is
also provided that reflect the company brand colors and themes. A professional
job site helps in strengthening the online identity and helps reach quality
candidates who want to know about the company and are worthy of the recruiting
efforts. The career portal is integrated with the employers online site and
powered by Rozee.pk.

2.3.

Ownership structure

Major shares in Naseeb Online (Pvt) Ltd are held by Naseeb Networks Inc. which is its
parent company. The remaining 3 shares are held by the following:

Monis Rehman

CEO & Chairman

Lutfullah Khan

Director

Sadia Khan

Director

2.4.

Organization Chart

Board of Directors:

Monis Rehman

CEO & Chairman

Lutfullah Khan

Director

Sadia Khan

Director

Chief Financial Officer: Saboor Ahmed

Manager finance: Naveed Akhter
Auditors: KPMG Taseer Hadi and Co
Legal Advisors: Ernst & Young Ford Rhodes Sidat Hyder (EYFRSH).

2.5.

Industry Analysis

Rozee.pk is project of its own kind. Before it, no such organized effort had been made to
develop such a job portal in which rozee.pk is leading in all matrices. Other online portals, if any,
in market are in no way comparable and none of these can be considered as Naseeb Online (Pvt)
Ltds direct competitor. It is therefore known as Pakistan number 1 job website.

2.6.

2.7.

Associated Concerns

Naseeb Network Inc (Parent Company)

KPMG Taseer Hadi & Co (external auditor)

Ernst & Young Ford Rhodes Sidat Hyder (legal consultants)

Major Revenues & Expenses

Major chunk of revenues at Naseeb Online are attributed to Rozee.pk in the form of gain
from different packages it provides as well as revenue from the various advertisements at its
website.
Major expenses at this client mainly comprised of administrative costs such as electricity,
rent, salaries (especially the web developers) and generator. Apart from it costs associated with
Internet and IT consumables, networking and equipment upgrade (computers) that were very
frequent also formed an equally important cost in expenses.

2.8.

Market Position & Future Prospects

Rozee.pk is leading in the business it is providing and hopes to cater to much more number of
employers and job seekers. Its market position can be judged from the following statistics

3. Audit Methodology
Audit methodology adopted by any firm varies depending on factors such as Size,
Business Nature, and Group Structure etc. However, in majority companies risk based approach
is followed. KPMGs audit manual is KAM. It includes detailed information about every head of
the audit process for example cash and bank, investments, expenses etc. It gives step by step
checklist for verification of the data that comes under these heads. KPMG relies more on
analytical procedures as compared to other audit firms like PWC that relies on substantive
procedures which creates a major difference of the audit methodology used.
Risk assessment is the first step in the audit process. An overall analysis of the industry is
carried out and it involves PEST and SWOT. Critical areas are pointed out which basically

require more focus during the course of audit. Variance analysis is carried out where there is
more risk. Controls are identified and segregation of duties is checked. IT personnel hired by
KPMG checks the clients software
Following this methodology, once the risk assessment has been done, last year line items
are compared to the current year items (the relevant audit period). High variations are
investigated on initial basis. Then every line item is worked upon using following techniques:
First in test of controls, we evaluate controls adopted by the client for complete and
accurate occurrence of transaction. We inquire client regarding the procedures being followed,
review the Standard Operating Procedures (SOPs) and also check the existence and effectiveness
of each control implemented by performing a walkthrough of every control. Then as per KPMG
policy, we perform 25 TOCs on each line item on random basis. Controls are checked and
recorded of each transaction. If it is observed that most of the transactions were conducted in line
with controls, then we conclude the line item to be satisfactory. However, In case that it is
observed that most transaction did not follow the controls, we raise our TOCs sample from 25 to
40 and again they are reviewed. If the conclusion remains unsatisfactory, it is reported to the
Board of Directors of the Client.
After TOCs, transaction testing is performed on transactions included in Line item GL(s)
of the company. Number of transactions is determined using KPMG Sampling Plan. It is an
automated software application that applies materiality, risk, and sample selection on the input
data (GL Transactions) and provides the user with numbers of transaction that must be vouched
to cover the risk of misstatement of occurrence, existence and accuracy. KPMG has 6 standard
checks that must at least be checked in transaction testing, these include Invoice in the name of
the Company, Recorded with correct Amount, and Recorded in correct account, WHT
deducted, expense for the purpose of business and Traced into Bank Statements. This gives
a clear understanding of the transactions included in the line item GLs.
Transaction testing is usually conducted on transactions which are not of repetitive nature
(in amounts) and are distinct to each transaction included in the particular line item GL. In case,
the transaction are of repetitive nature (both in amounts and nature), we conduct an analytical
working. For example, if we know that the company has to pay Rs 2 Million monthly for 6

months, in this case we multiply Rs 2 Million with 6 months i.e. Rs 6 million and compare this
amount with GL balances. The difference up to 5% is ignored. Any difference above 5% is
investigated and recorded with the client to the satisfactory level.
Different audit procedures are used to verify the assumptions of valuation, accuracy,
completeness, cut-off etc. In case of an evidence of fraud or non-compliance, materiality is
checked according to which the decision to qualify or not is determined. If the fraud does not
pass the materiality threshold, efforts are made to still resolve the issue.
When overall risk is low and since we performed test of controls therefore additional
procedures i.e. substantive procedures are used along with these testing procedures. These
procedures include some common audit practices like third party verifications, inspection of
documents, recalculation of numbers, re-performance of the formulae applied, circularizing
confirmations and physical verification of assets as part of audit. There are transactions which
require proper documents for their support. E.g. Purchase of land. Security deposits etc. We
obtain these documents for our audit record. Also for Balances standing in GLs which relate to
Debtors, creditors, advances (received and made) and bank balances, we circularize balance
confirmation to the parties/ vendors/ bank directly.

4. Application of IT in Audit
KPMG has a separate IT department and uses E-Audit software as part of its audit
methodology which is KAM technically. E-audit is a global electronic audit management tool
that was created by KPMG to provide the methodology, guidance, and industry knowledge
needed to perform efficient, high quality audits. It is customized auditing software which inputs
required data from auditor, assesses the risk (already incorporated in software), ensures the
completeness of data and gives an assessment once audit is complete. Working papers are first
prepared on Microsoft Excel and are than attached in modules of E-Audit (as per certain
instructions). These working papers are analyzed by E-Audit and conclude on the risk,
completeness and overall audit of Client. Huge data input such as working papers, scanned
documents, other related supporting documents, materiality levels and many other forms are
filled in E Audit to ensure its completeness. Another use of IT application is KPMG Sampling

Plan. This again is customized software which generates the number of transactions that must be
vouched to cover the risk of material misstatement in occurrence, existence and accuracy of
transactions in GLs of the Client. Both these applications are reviewed by Job In charge,
Manager and Partner before we provide audit opinion (report) to the client.
E-audit also helped KPMG to reduce its paper work and save its storage costs as now all
of the work is done on this e-audit software built in Microsoft Excel. It also makes sure that no
important piece of audit information or control is left out as you cannot move on unless you fill
in the required controls and asked information. Thus, it provides the basis for a more reliable and
complete audit while reducing the need of paper and storage costs at the same time.

5. Note on Areas Assigned

5.1.

Audit Plan

Naseeb Online was a client of KPMG for the third consecutive year. The day we arrived
at our client, the job in charge had an introductory meeting with the director of Finance, Mr.
Saboor who then introduced us to other relevant officials at the Finance department. After that
the audit plan was devised. Deadlines were set in discussion with the KPMG manager, Director
Finance and Job in charge for various targets. Keeping in view the previous years financial
statements and audit procedures which were carried out for the same company, the job in charge
mentioned the important areas which were to be stressed upon. The main areas to be stressed
upon were the revenue and payroll. After that, different heads were assigned to the team
members.
I was not assigned any area in particular however the area my job in charge wanted me to
assist in the most was the area of Payroll of my audit Client Naseeb Online Services (Private)
Limited.

5.2.

Steps performed by me individually

Firstly I made a Lead which showed the comparison of current year GL balances with
their respective last year balances. The client had given us one computer with access to its
Peachtree software which made it easier for us to compare the two year statements.

Next, an analytical working was made for Salaries, wages and other compensation made
which was an interesting yet technical working to be performed. The procedure was known as
Salary- Global. My supervisor explained to me how this analytical comparison was to be carried
out and upon his directives, I used the amount of salary; wages etc from December 2011 Salary
Sheet of the company and multiplied this amount with 12 months. Then I added the impact of
new joiners who joined the company during the period under review, subtracted the impact of
leavers during the period under review, and added the further impacts of EOBI, Increments,
Medical and Bonus to employees, Daily allowance, and Gratuity expense for the year. The sum
of all these to the product of 12 month salary once calculated gave me the balance that should
have been equal to current year GL balances. On comparison, it stood below 5%, thus concluded
satisfactory.
Test of controls on new joiners and leavers were performed in which I assisted my job in
charge. In this I stated the effect of leavers and joiners in financial terms on the client during the
year taking into account the months or in some cases days they served and multiplying the period
with their salary. Control weakness were observed, which is to be reported in Management Letter
along with Financial Statements.
Then, I worked on individual items with my job in charge. Bonus amount was verified
from Bonus Approval letter signed by CEO Mr. Monis Rehman. In individual items, I first
worked on Provident fund which was 8% of the basic salary of each employee. My calculations
matched with those of the client as variance was as little as to be 0%.
Next, it was EOBI. I verified that all the persons registered and employed by the
company are contributing the specified amount, this amount must be deducted from their gross
salary, and the Employer too is making a contribution which is to be 5 times more than the
employees contribution (Rs 350 which after September arose to Rs 400). Both these deductions
were added and verified from EOBI Challans. A copy was retained of each month EOBI Challan
from client as evidence. Calculations were also done for car allowances that were given to some
senior employees. My total varied but it was a negative 2% which was ignorable. I also
performed contractual staff variance analysis in which I had to ask the client about the reasons of
why various balances had more than 5% variance.

Finally, Medical allowances for the year were computed. It was the most technical work
as I had to check for each and every invoice of hospital/ doctor that employees had submitted.
Later, my job in charge looked into it and made relevant disclosures.
For checking and assurance purpose, my working papers were reviewed by my Job In
charge, manager and Partner. Review points were reworked and the final working papers were
attached in E Audit.
Apart from working on payroll I also performed several other tasks such as preparing a
rent global. I obtained all the rental agreements from client pertaining to its other offices. I
thoroughly studied them and as per those rental agreements, I calculated what balances were to
show up for rents and compared it with totals as per client.
Also I was given the task of physical confirmation of various assets at head office. I got
lists from the client, not properly maintained, about the various assets of the client. I carried out
both list to floor and floor to list techniques in verifying air conditioners, furniture, computer
systems, generator, UPS, 3D graphic design Laptops and the like. I also had to acquire certain
bank and legal confirmations that were to be included in our working paper files.

5.3.

Problems observed & Solutions

Since I was not having any one particular area to look into I came across various
problems in different areas during this whole audit. It was often the case that the transactions that
I had to vouch were often not in their relevant files or in the proper ordering so it was a hassle to
locate them. I used to ask the management about the respective documents and thus sometimes
management sorted them and at other times I used to locate them.
When I was assisting in the area of revenues, it was so the case that the Company had
more than 40 websites registered in its name and Naseeb Network US, but was only booking the
revenue of rozee.pk in its books. I personally looked into it and figured out that majority
websites were either inoperative or were an add-on to rozee.pk. This was checked through
inspecting the view-source information of website in which it was clearly stated on ever site that
it was a product by Naseeb Online- Rozee.pk. Also the Company received all remittances of its
credit card sales in City Bank Merchant Account, which is not in the name of the Company. This
matter was disclosed in TL.

Moreover, The Company did not maintain proper fixed asset register. There was no asset
wise detail of fixed asset and no coding of fixed asset in respect of Property Plant and Equipment
which created problems when it came to verify assets physically.
While going through HR files of respective employees for payroll area, I found out that
there were a number of employees for whom no file had been made or updated and so I had to
follow up with the relevant departments head to get specific details of employees.
We were not provided adequate stationery which also delayed our work in the beginning
of the audit assignment. Later, there was another issue of some problem with the printer. Also
regarding banks and legal confirmations, there were constant delays.

5.4.

Sampling Technique

KPMG uses KPMG Sampling plan. Materiality level for each Client is calculated. This
amount is entered along with other specifications related to the client based on our risk
assessment. The KPMG sampling plan provides the number of transaction that must at least be
vouched to cover the population under review for checking its occurrence, existence and
accuracy. This number of transactions provided by sampling plan includes material (in amount)
transactions as well as transaction below our materiality level to ensure the covering of complete
population.

6. A note summarizing your experience with the

audit firm highlighting lessons learned in the field
of
Management skills:
I learnt that management skills are extremely important in order to meet deadlines.
Meeting deadlines in time are very important and any work that is delayed will reflect as bad
management skills. There are times when one is handed more than one task simultaneously and it
is at the discretion of that person to do some tasks before others. This process of prioritization
however is only possible if one is able to manage the tasks efficiently.

Interpersonal skills
Interacting with a team in which all were my seniors was too helpful in developing
interpersonal skills in me. As there are people of all types and on different hierarchies within an
organization it is with the process of watching and learning that one is able to interact in the right
manner with each of them. This was what can be called an experiential learning for me by
interacting with people from all hierarchies.

Presentation skills
My manager Miss Huma Bashir along with other members of my team always
encouraged me to equally contribute in all discussions. There were times when I had to present
my opinions and views on improving some processes or ways of doing things, and with the
process of feedback, it was refined over time.

Organizational Behavior
Working at a client enabled me to learn of their atmosphere and helped me to understand
the workplace culture, and hence the organizational behavior of staff. It is an important piece of
information because as an auditor one needs to be in constant touch with the client staff and the
best way to meet deadlines is to work in harmony with them.

Time management skills

I learned that work matters more than workplace timings. People often need to sit late in
order to finish off their assignments. This is not necessarily a bad idea because during office
hours, it is prudent to gather all the pieces of information from client, and then sit after hours (if
it comes to that) and consolidate information when you do not need client interaction. I faced this
situation towards the end of our audit when we were finalizing things. This falls under time
management.

8. Other relevant and interesting learning opportunities that came

across during the internship.
Some very interesting and exciting experiences as part of my internship were the stock
counts I performed. My first stock count was at Hyperstar Mall located in Fortress Stadium
Lahore. I was to report at 10:00 pm sharp and the stock count was to continue till next morning. I
reached at the right time and met some new people from the team KPMG who were also there
for the stock count. While the mall was being closed, we were beheaded towards office area
where we waited for few minutes before the mall was finally closed down and we were called to
start up with our tasks. To our advantage, stock count at warehouse was already completed by
another team of KPMG in that same morning. So with that happiness of not staying at an area
without Air Conditioning, we entered the mall. As it was my first experience and I had no
knowledge of how this task is to be carried out, my supervisor at job Mr. Waqas Hafeez along
with other members, explained me how this process was to follow. Once the listings were
prepared and handed out to us we were allotted areas by our supervisor. I was made in charge of
area that comprised of LCD & LED screens, cell phones, refrigerators and ovens. These items
are most likely selected for stock take because they represent a material amount and the
technique applied in any stock take are list to floor or floor to list. I randomly selected
products and was able to apply both techniques to identify these items. While applying these
techniques I also matched product code and item code on both the product and the list. What I
can say about this experience is that Hyperstar management was active enough and had imposed
very efficient internal controls due to which there was hardly a case that I wasnt able to locate
anything. Once we were done with 50 items selected at random, we all handed over our sheets to
the supervisor and left the mall to have a breakfast together. Afterwards we all left for our homes.
The second experience I had of stock count was when I was sent to Faisalabad, as part of
KPMG Karachi assignment outsourced to KPMG Lahore. This time, I had one job in charge with
me and we two were to perform stock count at warehouses of Dalda Foods Ltd and Wazir Ali
Khan Industries. We left early in morning through DAEWOO and received a very warm
welcome from our client. The client specially came to receive us at DAEWOO terminal from
where he took us to his warehouse. We were served refreshments and after having them we begin
to work. While my job in charge dealt with all documentation I began to roam around and started
with the two techniques of stock count. After randomly selecting samples from lists as well as

floor I assured my supervisor that the stocks from both the companies were correctly stated.
However at this place we identified a weakness that instead of having a computerized stock
record system manual records were being kept that would make it difficult in terms of stock
clearance policy (FIFO/ LIFO).
My third stock count took place at Berger paints which was the task of four days. The
products were in large number and were classified in three categories raw materials, work in
progress and finished stock. The client was not supportive and wanted us to conduct stock take
along with their employees as they knew there were many ambiguities. We refused to follow
them and asked for listings so that we can independently do our job once performed by the
employees. After being provided with the listings, significant deviations arose and so we
increased our sample size to be tested. Problems such as product codes did not match, products at
list did not exist, and damaged stock was not identified as damage etc were common. But the
thing that came to me as a big surprise was to find out sealed empty cartons that were supposed
to be part of inventory but had been stolen. This indicated poor internal controls. We wrote down
all such findings and got signatures from supervisors at Berger. That was very tough experience
for me as the risk was too high and we had to check as much stock as possible.
All these stock counts indeed helped me learn various lessons. I learned how to carry out
stock take, how to deal professionally with the clients to make them agree upon your decision,
how to test internal controls of any business. Overall, this whole experience was truly a great
learning opportunity and it proved very useful to give me an insight of the practical field.

Work Cited

"History ." History. KPMG, n.d. Web. 13 Sept. 2013.

http://www.kpmg.com/pk/en/about/pages/history.aspx
"Leadership ." Leadership. KPMG, n.d. Web. 13 Sept. 2013.
http://www.kpmg.com/global/en/about/organization/leadership/pages/default.aspx?
utm_medium=mdd
"Information Technology ." Information Technology. KPMG, n.d. Web. 12 Sept. 2013.
http://www.kpmg.com/us/en/services/advisory/management-consulting/managementconsulting-by-function/pages/information-technology.aspx
"Naseeb Networks, Inc." Naseeb Networks, Inc. Copyright 2008 Naseeb Networks, Inc.,
n.d. Web. 12 Sept. 2013. http://www.naseebnetworks.com/index.html
"Our Audit Methodology ." Our Audit Methodology. KPMG, n.d. Web. 12 Sept. 2013.
http://www.kpmg.com/eg/en/services/audit/pages/ourauditmethodology.aspx
"ROZEE.PK - Why We Are #1?" ROZEE.PK. Copyright 2013 ROZEE.PK, n.d. Web. 12 Sept.
2013. http://www.rozee.pk/why-we-are-number-1.php