Vendor and Supplier Audit

Testimonial – Jenni N.

AMS-PAR follows a consistent process. I don't see a reason to change what you are doing.

Testimonial – Feliz M.

Sincerely I wish more audits were handled in this procedure.

Testimonial – Mike M.

My team respects AMS-PAR's work and has never had issues with documentation.

Testimonial – Kelvin A.

It has been an absolute pleasure working with AMS-PAR on this assignment, certainly a very well-managed, professional and efficient operation.  The AMS-PAR audit team was fantastic to work with. We certainly will keep AMS-PAR in mind for future engagements

Testimonial – Mark J.

My company has used AMS-PAR for Oil and Gas Joint Venture Audit services for the last 8 years.  We are extremely pleased with the professionalism demonstrated by all of AMS-PAR’s employees and contractors.  My company is also very satisfied by the results and findings...

Testimonial – Janet R.

The lead auditor conducted the audit in a very professional way, and always kept the communication channels open for discussion, feedback, and questioning.

Testimonial – Kevin A.

It has been an absolute pleasure working with AMS-PAR on this assignment, certantly a well managed, professional, and efficient operation.

Testimonial – John A.

AMS-PAR's IR system helps me prioritize my work.

Testimonial – Angie R.

The audit lead communicates very well with our staff. We received updates every week.

Testimonial – Brian P.

The field lead was very efficient and knowledgeable that minimized business disruptions.

Testimonial – Terry M.

The last thing a busy oil and gas accountant wants to find in the morning mail is an audit notice.  However, from initial contact through final report, the AMS-PAR audit team was courteous and professional.  Their software, particularly the Information Request (IR)...

Testimonial – Joe D.

I want to thank you and your company for the service that the audit team provided. I could not have done what they are doing without their help and support.  I have enjoyed working with the team and appreciate the approach taken to get into the meat of the project.

Testimonial – Becky H.

The AMS-PAR IR System was easy to use and very user friendly.

Testimonial – Ashley O.

All requests were clearly communicated and labelled. This made it simple to plan and allocate our resources required to complete tasks, as well as respond efficiently. Any correspondence was easy to track with the use of request numbers and upload system.

Testimonial – Becky M.

Our relationship with AMS-PAR is important and all that you do to bend over backwards for us is greatly appreciated.

Testimonial – Brian P.

The data requests are submitted and tracked in an organized manner

Testimonial – Larry M.

The ability to exchange large data files was very effective.

Testimonial – Feliz M.

I do all of our audits and this was an amazingly different audit process and experience

Testimonial – Tom J.

AMS-PAR uses experienced auditors.

Testimonial – Brian P.

The field lead was very efficient and knowledgeable that minimized business disruptions.

What is a Vendor Audit?

A vendor audit is the process of reviewing the commercial relationship between a company and its suppliers, contractors, and consultants.  The audit may be limited to confirming vendor billings, but the relationship between a company and its vendors is more than generating and paying invoices.  The relationship is affected by the ability to perform, the need to comply with safety and other policy metrics, the imposition of business processes affecting the efficiency of either party, and the expectation of maintaining ethical business relationships.

An audit can be focused externally or internally.  External audits focus on the supplier’s compliance and business practices whereas internally focused audits generally evaluate internal processes and controls related to vendor qualification, on-boarding, and oversight, commercial terms and conditions governing the business activity, payment authorization, business ethics review, and incident investigation.

An audit can be designed to evaluate and document the effectiveness of these and any other component of the commercial relationship.  The objective of a supplier audit program is to assess compliance with the contractual obligations and business practices, and to ensure controls are working as intended.

Vendor and supplier audits will mitigate contract leakage and the loss of corporate profits.  They are an effective tool in a company’s risk management program.

Why Conduct a Vendor Audit?

There are many reasons why companies conduct supplier audits.  The four

  • Deterrence
  • Financial recoveries
  • Control evaluation
  • Process improvement.

Vendors rarely invoice with 100% accuracy and those responsible for authorizing payment often do not have sufficient information, time, or expertise to examine invoices in detail to ensure they are accurate. Billing errors often result from data capture errors, processing mistakes or the misinterpretation of complex contractual provisions.   Conducting an audit may be the only way to obtain the transactional detail needed to provide assurance that billings are correct.  Typical issues identified in supplier audits include:

  • Pricing errors, particularly when rates change
  • Discounts not applied or computed correctly
  • Mark-up computation errors
  • Staff qualification for rate billed
  • Labor and equipment hours billed
  • Duplicate billings
  • Expense pass through
  • Sales tax
  • Returned goods and material credits not processed
  • Deviations from agreed terms and conditions
  • Credits on account not taken

The data obtained during the audit process and the analysis performed will help identify these and other potential billing errors.

Supplier audits are also conducted specifically to evaluate a supplier’s internal control environment such as controls related to its ability to perform, material management, safety training, hiring practices, and invoicing accuracy.  These evaluations test the business relationship and importantly the supplier’s ability to continue to meet its contractual obligations.  These types of evaluations may also identify business process changes that will improve the business relationship and transactional efficiency.

Why AMS-PAR?

Vendor and supplier audits are not a by-product of AMS-PAR’s other compliance audit work.  This type of contract compliance audit work is a core component of our service offering and a core competency.  We understand the importance of strong relationships with vendors and suppliers and work hard to maintain and improve those relationships.  Survey results consistently show AMS-PAR performs better than other service providers.

We can help develop your vendor compliance program or help execute your existing plan.  When developing a program, we will evaluate your corporate expenditures, review contracts and rate schedules, and talk with key stakeholders to better understand the commercial relationship and perceived challenges.  This information is then used to develop a vendor risk management program.

When conducting individual compliance reviews, our project methodology delivers consistent results and ensures client objectives are met.  These reviews are conducted with minimal disruption to or additional burden on your staff.  Leveraging institutional knowledge and analytical tools allow us to interrogate data differently so that high-risk transactions can be identified.  We will examine the transaction details to assess compliance with the underlying agreements.  Our processes provide clients with a higher level of assurance that their vendor relationships are properly evaluated.

Our reports will detail discrepancies, explain the root cause of the underlying issue, and recommend solutions and process improvements to minimize future concern.