How procurement auditing keeps financial and legal organisations safe

Posted on Sep 07, 2023 at 10:09 PM

Companies seek periodic or sometimes daily operations to maintain their financial security or detect any risks and prevent them from affecting them.

The procurement auditing process is one of the most important of these different processes, in which all purchases get monitored in the procurement department and the workflow within the department is under the stipulated conditions.

What is Procurement Auditing?

Procurement auditing includes all the precise procedures that seek to review the work of the previously agreed upon business organisation in contracts with suppliers.

This process aims to assess the effectiveness of the company's purchases in achieving public benefit within the company, as well as to ensure compliance within the framework of contract laws and conditions.

Internal procurement controls and audits handle the accuracy of the procurement management system, vendor record audits and auditors' Obligations, and execution of procurement orders under regulations.

The audit work aims to improve the efficiency of spending. By scrutinising and auditing the sales cycle, you can analyse the procurement documents, test them, identify any problems you face, and provide appropriate solutions to improve efficiency.

What are the benefits of checking purchases?

Audits are of many importance and benefits. Since audit procedures help to access all procurement records, the benefits are as follows:

• Facilitating the continuation of work:

Scrutiny can help detect stumbles that cause problems in the performance of the work or detect what causes slowness in the organisation's procurement cycle. The possibility of this requires analysis of purchases when auditing. Saving time and facilitating the buying cycle will be influential in improving buying efficiency and increasing its control.

• Risk Reduction:

The most important part of procurement auditing is to remove financial risks from the organisation. This is through the comprehensive evaluation of procurement records, with continued scrutiny and control, to prevent any process that interferes with the internal compliance system.

• Avoid fraud:

One of the most dangerous things for organisations is fraud, and it is possible, through audit, to detect any fraud attempt that may have occurred or occurred. In this case, the audit includes the audit of all procurement financial statements, with the audit of relevant files, financial accounts, and all procurement documents.

How is the procurement auditing done?

Although the organisation, follow-up, and management of the company's procurement auditing is beneficial, it is a complex phase and needs scrutiny of records, contracts, etc.

This requires extensive experience that gives her a procurement training course in London and a long practice. Next, the steps to tool the route of this phase are :

1. Engaging management personnel and stakeholders:

The audit process requires reviewing, analysing, and evaluating information, thus concluding findings and making decisions. This requires a committee to help you generate ideas, analyse data and conclusions, and make decisions. This committee must include managers and stakeholders.

2. Conclusion of problem areas:

One of the most prominent audit endeavours and objectives is to find problems that hamper the work. The main focus is to detect any problem area through three phases: contract auditing for procurement, process auditing, hence reviewing the procurement record, and listening to purchasing managers, where they can identify all the areas that cause problems.

3. Checking buying Forms:

Handling and checking all cancelled buying forms because the number of purchases in any company is too large, but several orders from some significant types of assets are at random and checked, it is essential to focus on the details of each order, such as special notes, signatures, and pricing.

4. Vendor Selection Audit:

Selecting the seller depends on several particular criteria; when meeting these criteria, it gets fixed. The vendor selection audit aims at the absence of standard adjustments to assist some vendors in entering the procurement section.

5. Review of purchases:

This step aims to improve and develop purchases made by the organisation's staff, including knowing what to improve when buying and listening to the team about what can affect the efficiency of the procurement process.

6. Creating reports for results:

At the end of the procurement auditing process, including the results is essential in an organisation's reports and sent to senior officials, a key factor that helps them make their decisions.

In conclusion, 

The importance of the procurement auditing process has become evident in this article. It is so to develop a complete strategy to tool the audit of the company's purchases to ensure the security of the assets.