Audit Work Program and Shrink Analysis AttII 3 07

Example Audit Work Program For Magazine Shrink Analysis Dated: December 2004 ATTACHMENT II EXAMPLE AUDIT WORK PROGRAM FOR MAGAZINE SHRINK ANALYSIS The following audit program was developed by CMG with the sole purpose of communicating suggested protocols for on-going shrink analysis (audits). At the date of its release, it serves as a draft overview to begin discussions on designing and implementing on-going audit procedures. We anticipate that the audit program would be enhanced as more knowledge is gained through parallel test efforts. Please refer to CMG’s Scan Based Trading Position Statement for our risk assessment, and other requirements, that must be in place prior to entering into an SBT relationship for magazines. This audit program is only a guide, and is not intended to replace judgment of management or an auditor. In addition, the audit program should be expanded with detailed audit procedures, as necessary, to fit the requirements of each SBT relationship, based on business partner information, product flow and an internal control structure. For purposes of this document, following are definitions of SBT, Pay From Scan ("PFS") and Shrink respectively, for your reference. Scan Based Trading (“SBT”) – A change in both financial and operational policies and procedures in the exchange of magazine product for newsstand distribution. SBT in this ...