Computerized Procurement System Environment

Procurement and Audit notes revision

Procurement entities must capture important information related to both internal and external events and activities in both financial and non-financial forms. The information must be identified by management as relevant and then communicated to users of procurement audit reports who need it in a form and time frame that allows them to do their jobs.

The information relevant to procurement reporting is recorded in the e- procurement or procurement management information system and is subjected to procedures that initiate, record, process, and report procurement function transactions. The quality of information generated by the system affects management’s ability to make appropriate decisions in controlling the entity’s activities and preparing reliable procurement reports.

Reporting and communication occurs in a broader sense, flowing down, across, and up the organization. All employees must receive a clear message from top management that control responsibilities must be taken seriously. Employees must understand their own role in the internal control system, as well as how individual activities relate to the work of others, and how to report significant information to senior management. There also needs to be effective communication with external parties such as suppliers, government and procurement regulators such as Public Procurement Regulatory Authority and the public.

Procurement Management Information System in Auditing
For internal control and documentation purposes the auditor may view electronic procurement system or procurement management information system as a series of steps by which economic events are captured by the enterprise, recorded in the procurement records. Controls are needed to ensure that all the relevant economic events are captured by the procurement systems, and that processes that modify and summarize procurement information do not introduce errors.
To understand the procurement systems sufficiently, the auditor should identify major classes of transactions in the client’s operations and understand the procurement reporting process thoroughly: from how the transactions are initiated to their inclusion in the procurement records. The auditor should identify significant procurement records, supporting documents and accounts in the financial statements.

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