Maintenance and Servicing

Control Objectives for Maintenance and Servicing

(a) To ensure that an authorised product maintenance and servicing system is

documented and established to support customers and discharge the
organisation's liabilities;
(b) To ensure that all service requests are validated and classified as either
chargeable or non-chargeable (i.e. within warranty);
(c) To ensure that all service requests are accurately logged, recorded,
allocated and subsequently confirmed as completed;
(d) To ensure that adequate staff, stock and other resources are made
available to support an efficient and cost effective service;
(e) To ensure that servicing staff are adequately trained and appropriately
equipped to effectively conduct their duties;
(f) To ensure that all the costs associated with the provision of maintenance
and servicing facilities are identified, accounted for, authorised and monitored;
(g) To ensure that the performance and cost effectiveness of the maintenance
and servicing facilities are subject to ongoing monitoring and management;
(h) To ensure that alternative methods of providing maintenance and
servicing (i.e. contracting out to an external service organisation ) are considered
and kept under review;
(i) To ensure that, when applicable, the customer is charged for servicing
work at the recognised rate;
(j) To ensure that debtors accounts for servicing activities are accurately
established and maintained;
(k) To ensure that outstanding debtor accounts are actively pursued and paid;
(l) To ensure that the hours worked by all service engineers and maintenance
staff (including travelling) are accurately recorded, accounted for, and charged out
when necessary;
(m) To ensure that the usage of all spares and parts is valid, authorised,
accurately accounted for, and costed;
(n) To ensure that faulty or sub-standard components are referred to the
suppliers for replacement or credit; and
(o) To ensure that accurate data is obtained on fault histories and recurrent
problems as the basis for continually improving the product.

Risk & Control Issues for Maintenance and Servicing

1 Key Issues

1.1 Has management established an authorised maintenance and

servicing policy which defines the conditions, charges and performance
criteria?
1.2 How can management be assured that servicing activities fully
comply with the documented policy?
1.3 How can management be certain that all maintenance and service
requests relate to valid customers?
1.4 What mechanisms prevent the servicing of products for non-
registered or invalid customers?
1.5 Are measures in place to accurately record all service requests and
differentiate between those within and outwith warranty as the basis for
determining the charging arrangements?
1.6 What measures ensure that all service calls are promptly allocated to
an engineer and regularly progressed until completion is confirmed?
1.7 Are outstanding or particularly problematical service calls
adequately identified and progressed to the customers satisfaction?
1.8 Has management established service level criteria which are subject
to performance monitoring and follow up?
1.9 How does management ensure that adequate and appropriately
trained staff, materials, servicing equipment and all other resources are
made available to fulfill the obligations and workload?
1.10 Are all the costs associated with the provision of maintenance and
servicing accurately identified, accounted for, authorised, and monitored?
1.11 What mechanisms ensure that all valid customer charges (labour
and materials) are accurately applied and pursued for settlement?
1.12 Are all service debtor accounts accurately reflected and accounted
for in the accounts receivable system?
1.13 What mechanisms ensure that the charges made for out of warranty
work are sufficient to cover the actual costs of provision?
1.14 Is management provided with accurate data on the actual labour
and material costs incurred?
1.15 How can management be assured that spare parts are only utilised
for bona fide purposes and are fully accounted for (including periodic
verification)?

2 Detailed Issues

2.1 Have adequate steps been taken to record all the relevant sales as a basis
for validating service requests?
2.2 How can management be assured that all service requests are promptly
and effectively dealt with?
2.3 Are servicing performance statistics produced and circulated to
management for monitoring purposes, and would shortfalls, delays and problems
be detected and resolved?
2.4 What mechanisms prevent servicing work being conducted outwith the
warranty period where no charge is made to the customer?
2.5 How would management be alerted to potential staff training needs?
2.6 Has adequate and operational servicing equipment been provided?
2.7 How does management confirm that the present servicing arrangements
are the best option (and are alternatives assessed)?
2.8 How can management be assured that servicing personnel are only
engaged on official workloads?
2.9 What measures ensure that the correct labour rates and component costs
are reflected on customer invoices?
2.10 Where faults or recurring problems appear to be related to externally
sourced components, are management taking action to seek redress from the
supplier?
2.11 Where applicable, how does management confirm that all the relevant
legislation and regulations are being complied with?
2.12 How is the accuracy of data input from other systems (i.e. sales records
and component costings) confirmed?
2.13 How is the accuracy of data output to other systems (i.e. accounts
receivable) confirmed?