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1) While understanding the business phase, we reviewed the website of Royal Airport Services and identified the
following observations:
a) Saudi Airlines in appearing our clients where actually it is no more our client (screen shot is pasted below).
b) Vision is confused with mission statement. i.e. “Excellence in Handling”.
c) Tabs for “Amazing Wing” and “Staff Portal” is blank.

2) Deferred tax is a major accounting concept which shows how much amount of tax we may have to bear in
future. However, we have observed that there is no calculation of deferred tax being made in Royal Airport
Services which is disappointing.


3) There is no process in Station (Accounts) or Head Office (Accounts) of ensuring whether the services mentioned
on Work Order Form were actually provided to Airline or not. Reciprocally, it can be said there is an uncovered
risk that the ground handling services actually provided may not be reduced into the bill being sent to Airline.

4) Head Office is following cash basis for revenue booking. Information on invoices issued and not yet paid are
being maintained manually in an excel sheet. In such a case there is a huge risk that we may lose our track on
receivable hence losing our income against the services provided.

5) Sales Tax Invoices issued to Airlines are first being sent to Station Offices through couriers. There is a risk that
invoices may be lost when being issued from Head Office to Station which shall result in late recovery of our
receivables from customers.


6) We have observed that inventory of uniform received is being maintained on excel sheet. Neither there is any
inventory book nor any system of issuing Goods Receipt Note to the vendors. This gives rise to the risk of
inventory misappropriation.


7) Work Order is prepared in case of expensive items. However, there is no limit defined and it is up to Manager
(Admin & IT) to decide in which case he shall prepare Work Order and in which case, he shall not. There must be
a proper SOP in which limits should be defined.

8) There is a very strange thing that we have observed in case of IT related procurement that original purchase
order is not being issued to vendor, it is retained by Finance Department. As per Manager (Admin & IT), this has
been informed by Finance Department that they shall not release payment unless original PO is retained and
sent to Finance Department.


9) The demand from station is received telephonically / verbal. There is no defined standard form neither any e-
mail is being sent.

10) Analysis over the above demand is done by AM (Technical) for which there is no documentation / report, neither
there is any documentation retained for the decisions taken for physical inspections. Furthermore, there is no
physical inspection form. There is very much reliance on one individual.