Procurement Auditing is essentially a practical task. The procurement auditor always needs to reflect the nature of the circumstances of the entity under audit. It is unlikely that any two audit assignments will ever identical. It is however possible to identify a number of standard stages in a typical external procurement audit. These are as follows:
1) Procurement Audit appointment
2) Engagement letter
3) Initial planning
• Knowledge of the business
• Risk Assessment
• Internal control review (procedures)
• Control procedures (authorities/approvals/segregation of duties)
4) Preparation of the audit plan
5) Procurement system review
6) Analytical review techniques (Compliance Procedures-Application of control test procedures) like procurement are according to the controls established.
7) Considering the ways in which audit evidence can be sought
8) Substantive testing (transaction level procedures)
9) Reasonable assurance
10) Review of the procurement records (compliance with the standards/material misstatement etc.)
11) Preparation and signing of procurement report
Throughout this course we will be discussing all this stages of procurement audit in detail.
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