Internal Controls - Contracts

From Knowledge base
  • All new contracts have been reviewed and approved in line with both Divisional and Group policies prior to customer agreement


  • All contracts are reviewed for compliance against the Group Contract Policy and, where necessary, any deviations from this policy eg greater than 5 years in length or containing unlimited liability are authorised.


  • Approval has been sought and obtained from the Group Director of Financial Control prior to applying long term contract accounting and appropriate accounting has been applied to all contracts


  • Profit is only recognized on long term contracts when;
  • 1) the outcome of the contract can be reliably measured, and
  • 2) it is probable that economic benefit will flow to the company as a result of the contract, and
  • 3) the stage of completion can be reliably measured


For any contracts under Life Cycle Management (LCM)

  • 1)Are monthly LCM meetings held and attended by Senior Management?
  • 2) Are costs to complete reviewed and reassessed each month and signed off?