Importance of Procurement Audit
- Procurement audit protects the interests of the procurement stakeholders for example the investors, shareholders and the citizen would want to know how their money is spent and the value it adds to them.
- Procurement audit helps the company to meet its objective. Business processes need various forms of internal control to facilitate supervision and monitoring, prevent and detect irregular transactions, measure ongoing performance, maintain adequate business records and to promote operational productivity.
- Procurement audit being an independent examination of the procurement records, transactions and procedures gives credibility to the procurement records. The various users can therefore place reliance on them;
- Procurement audit ensures that the directors have fulfilled their statutory obligations and acts as a precaution against frauds on the part of employees.
- Procurement audit helps the procuring entity to detect and prevent procurement fraud.
- The Procurement audit provides recommendations on ways of improving the procurement and internal control system and in the standards of the company’s reporting to its members.
- Procurement audit ensures that the procurement records are prepared in accordance with the procurement laws and regulations and generally accepted standards. This improves the comparability of the procurement record.
- Procurement audit is a legal requirement and thus it prevents the company from legal suits.