Re: Purchasing department Audit HELP!
I'm currently hired as an Internal Audit of a manufacturing company. I start doing field audit for the company which is basically my core. However, the company require me to do systems audit on all department, currently my project is the audit of Purchasing Department as a whole. I'm starting to read the forums anything regarding audit of purchasing department. Can i ask for those you are doing systems audit a little guide to start of? maybe a Purchasing Department Audit checklist will greatly help. im am currently studying the current process of the company and at the same time reading my books regarding the Purchase process itself. I hope someone can give me a little guide regarding this.
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Company background:
The company is engage in local manufacturing of toothpaste and dish washing products. an employee of about 200 and serving nationwide wide a number of local distributors.
Please give your insights!
Regards,
chard
Purchasing, as specified in element 7.4, is made up of three main things.
First, is supplier control. Determine how they say they approve suppliers and what records of approval are kept. Many companies keep an approved supplier list (ASL). Randomly select a few suppliers and ask to see the approval records. Find out if they periodically review the suppliers, and if they do, ask to see those re-approval records. Refer to element 7.4.1 to make sure you are looking for all the requirements and if they have a purchasing procedure, that they are following it.
Second, is purchasing information. Randomly select a few purchase orders and see if the purchasing information is adequate. The basic idea is to describe what you are buying well enough that the person filling the order has no problem understanding what you need and that the person receiving the order can easily confirm that you actually received the right things. Refer to element 7.4.2 for the requirements. Be aware that the list that makes up 7.4.2 a-c is an "as appropriate" list, so you won't necessarily see all three for all cases.
As a cross check, go back to the supplier approval records and confirm that approved suppliers were used for the purchase orders you reviewed.
Third, is receiving inspection. This is confirming that you received what you asked for. Somehow within the organization a three way match needs to take place. The received product needs to match the shipping paperwork, and in turn needs to match the purchase order. Sometimes this is all done at receiving. Sometimes a receiving report is generated through the computer system which displays what is essentially a mirror image of the needed portions of the purchase order. Sometimes the confirmation that the product matches is performed by an inspection or quality person. No matter how it is done, the three way match needs to happen. If possible, observe some receiving to see how it is accomplished. If you can't observe receiving as it is happening, review several recent packing slips and interview the person performing receiving to confirm the practice meets requirements. See element 7.4.3 for the requirements.
This should get you started. Make sure that you also confirm that they are following their purchasing procedure if they have one.
Good luck.