Practical aspects related to contracts auditing

Author:Nadir ALI, PwC



Keywords:contract auditing, tender procedures, suppliers evaluation, contract risks, consulting policies, consulting projects inventory

Contracts exist în all large companies and government agencies, whether they be for goods, services, projects or consulting. To ensure that the organisation receives best value for money, organisations need to establish a strong system of internal control and contract auditing play a significant role în this respect.\r\n\r\nTraditionally internal auditors focus more on financial, accounting and compliance issues and less on value-for-money aspects. The author approaches the contract auditing from the operational effectiveness and efficiency perspective. Evaluating controls over purchasing might contribute to more efficient, effective, and value-added business processes that could result în increased profitability.\r\n\r\nIn order to be effective the contract auditing should be based on a structued and disciplinned approach and address the entire contract lifecyle from the needs identification to the completion and evaluation. Also the author presents the specific risks related to consultancy contracts and the key areas the internal auditors should consider when evaluating the consulting policies of the organisation.\r\n\r\n