Home » Supply Chain Audit

Supply Chain Audit

Supply chain audits under the relevant provisions of ISAE 3000 are elaborated separately.

Procurement audits have been conducted for government organizations engaged in humanitarian works. These involve complex considerations that are generic to the ethnic background of the countries in which these activities are conducted.

A unique field in which Verico Auditing specializes is that of the audit of carriers. This is relevant to companies who have a distribution hub at a location that provides excellent logistics connectivity like the UAE.

For example, a marketing giant moves cargo from dozens of manufacturing facilities located around the globe to the regional central warehouses, where the products are stored. These are then selectively re-containerized in accordance with the requirements of about a dozen distributors within the region. And the products are delivered by road, sea or air to such distributors and on rare occasions, returned. This involves complex calculation of duty (international, local as well as cross-GCC), freight (inward, outward, sea, air, road and return), demurrage (line and port), charges (handling, testing and expenses) and warehousing (handling, sorting, palletizing and storage).

The client issues a PO (purchase order) to the carriers (logistics companies), who raise an invoice for services rendered and send it to the auditor. The auditor ascertains the claim and sends a periodic list of invoices passed by email and the finance department effects the payment on the due date indicated. The invoices are periodically accumulated and dispatched to the document safeguarding agencies.

Such audit saves manpower cost to the client, improves processes, saves physical space and passes on critical responsibilities to experts.

Another unique field where Verico Auditing renders services is the simple weekly audit of purchase bills. In small and medium enterprises, the MD or CEO normally conducts all supervisory functions. He signs the purchase orders and the payment instruments. In between, deliveries are executed and invoices are received – with their variations. It is likely that with passage of time, the finance and procurement functions may collude or reach a stage of comfort that would encourage them to engage in malpractice or restrict them from detecting errors. The independent auditor makes weekly visits and scrutinises all material purchase transactions and vouches them for the MD, who would otherwise be unable to find time off his busy schedule and often defer payment, thereby saving his time and effort, relieving him from a monotonous responsibility and provide a third party check keeping his team on their toes.