Auditing Supply Chain Management - OAP234


​The management of the flows of materials, finished goods and related information to maximize the value of these activities for suppliers, companies, resellers and final consumers is vital for success in today’s fast-moving and cost-conscious economy. Organizations must coordinate operational and strategic activities across all business functions within and outside the enterprise to improve long-term performance and meet customer needs. This can only be achieved by using a total systems view of the relationships in the chain and making sure that all the parts work together efficiently and effectively. The resulting cost reduction, speed and perception of value differentiates world-class companies from those that struggle under the weight of unnecessary expenses, movements, bottlenecks and handling.

In this seminar you will learn about the units within organizations that are linked upstream and downstream to provide the products, services, information and finances from the source to end-user customers. You will also learn about the management of this chain, the planning and management of all activities involved in sourcing, procurement, conversion and logistics management, in addition to the coordination and collaboration that must exist between suppliers, intermediaries, third-party providers and customers. By focusing on business objectives, risks and leading practices that define essential control activities, internal auditors will acquire the skills to confidently audit their supply chain activities.

Prerequisite: Fundamentals of Internal Auditing (OAG101), Auditing the Manufacturing Process (OAP231) or equivalent experience.
Advance Preparation: None
Learning Level: Intermediate
Field: Auditing

What you will learn

1. Defining the Key Elements of Supply Chain Management and Strategies
- understanding the dynamics surrounding the key elements of the supply chain
- risk management and the integration of all components
- design and operation of an efficient and resilient supply chain
- the role of internal auditors during assurance and consulting engagements
- how to assess the organization’s management of the flow of information, products and funds
- link to product costing, working capital requirements and speed to market

2. Key Problem Areas, Essential Documentation and Audit Testing
- protection against supply chain disruptions
- transportation, real time information and the impact on customer satisfaction and profitability
- managing inventory in transit, diverting inventory to meet needs and avoiding bottlenecks
- documentation, contingency planning and real-time information from end-to-end
- tactical and strategic linkages to compliance, logistics, customer service, finance and procurement

3. Flexible and Agile Manufacturing
- assessing the organization’s ability to plan ahead, identify issues promptly and respond appropriately and timely to changes
- collaborative execution leveraging exception-based management processes
- scalability to match organizational goals and customer demands on the process
- balancing risks and controls in a dynamic environment that involves machine, material, operation, product, system and market flexibilities
- how to verify the effectiveness of activities that control cost, quality, capacity, speed of delivery and customizability

4. Distribution Strategies
- direct and indirect distribution channels and the risks surrounding each approach
- types of distribution strategies and techniques to audit each of them
- the role of technology and its impact on performance, delivery, controls and speed
- payments, allowances, special deals and other dynamics involving intermediaries
- vertical, horizontal and reverse channel issues that affect the supply chain and client relations

5. Information Technology and Management
- uses in transaction processing, planning, collaboration, order tracking, and delivery coordination
- audit procedures to understand the risks and controls involved
- how to evaluate the amount of data and its quality
- implications for audit planning and fieldwork

6. Cash Flow Implications
- understanding how supply chain management affects cash flow, payments, discounting and working capital needs
- invoice, payment, taxation and discount management
- balancing speed and compliance to optimize DPO and DSO
- evaluating management’s activities to reduce lag time, including forecasting and credit management
- auditing carrying costs, inventory turnover and order fill

7. Globalization and its Compliance, Operational and Strategic Implications
- FCPA, UK Anti-Bribery, CSR, corruption and reputation risk implications
- identifying the risk profile and key risks of related parties
- tax implications and other cross-border risks
- identifying financial, operational, compliance and strategic risks and controls

8. Forecasting
- pros and cons of various qualitative and quantitative methods
- key considerations regarding assumptions, analysis and the importance of verification
- key forecasting problem areas and what auditors should do

9. Customer Relationship and Service Management
- assessing the organization’s ability and effectiveness tracking marketing campaigns
- how to audit customer relationship management (CRM) in call centers, social media, direct mail, data storage and customer files
- key risks and controls related to recording, storing, data mining and understating customer information
- examining revenue per customer and churn using KPIs
- important considerations when auditing B2B, B2C programs and CRM systems

10. Demand Management and Order Fulfillment
- understanding the challenges in the sales to delivery cycle
- types of order fulfillment, their characteristics, risks and common controls
- how to audit the order fulfillment process: inputs, processes and outputs
- monitoring the link between forecasting and actual demand activities
- evaluating Just-In-Time (JIT) and build to order (BTO) strategies

11. Supplier Relationship Management (SRM)
- key objectives and risks involved in the assessment of suppliers and their capabilities
- auditing the main SRM activities
- assessing governance, strategic fit and performance
- KPIs and KRIs that provide a basis for data analytics and in-depth understanding of relevant dynamics
- ethical and compliance considerations

12. Product Development and Commercialization
- the 7Ps and the key objectives, risks and controls related to them
- balancing product, quality, strategy, timing and profit
- evaluating the steps in the concept to production cycle
- budgeting, contracting, partnering, patent and licensing considerations
- links to strategic planning and the role of internal auditors

13. Warehousing and Inventory Management
- understanding the key aspects of controlling the tracking, valuation, storage, usage and disposal of inventory in a dynamic environment
- balancing risks and controls with business objectives
- using and auditing barcodes, scanners, RFID systems and other technologies
- key elements of effective planning, sourcing, delivery, and replenishment
- evaluating the quality of integration and the complexities that multiple facilities and stock items present

14. Returns Management
- the challenges of reverse logistics and how auditors can add value
- looking beyond the accounting adjustments to sales
- recapturing the value and relevant metrics
- implications when recycling, reuse, disposal, refurbishment and repair is required
- fraud implications and how to detect it

15. Value Stream Mapping and Analysis: Lean Production and Processes to Eliminate Waste
- evaluating the current and future state
- identifying opportunities for improvement based on business objectives
- helping management improve the future state without compromising your independence or objectivity

Further information

ACI Learning
ACI Learning
3 Days
Scheduled dates
Course type:
Amsterdam, Atlanta, GA, Bandar Seri Begawan, Boston, MA, Burlington, MA, Cape Town, Charlotte, NC, Chicago, IL, Dallas, TX, Denver, CO, Dubai, Dublin, Dublin, OH, Hong Kong, Houston, TX, Las Vegas, NV, London, Manila, New York, NY, Oman, Orlando, FL, Philadelphia, PA, San Antonio, San Diego, CA, San Francisco, CA, Seattle, WA, Singapore, Virtual Training Room Only, Washington, DC

Contact Information

ACI Learning

6855 S. Havana St.
Suite 230
80112 USA