Business partnerships tend to be a regular occurrence in the modern-day business environment. This is essential because of the reason that today more and more companies synergize and collaborate in order to achieve growth in a much faster manner.
This also considerably improves their business competency and helps them to act as concerned entities in the modern day and age.
However, more often than not, business collaborations end up in disagreements and eventual revoking if business contracts. This leads to a considerable loss of time, resources, and more importantly, business opportunities for the company.
Therefore, there is no doubt to the fact that there is a tantamount importance of business contract, not only because it helps solve disagreements, but also because it acts as an aid in unprecedented business scenarios which might involve lawsuits.
Therefore, these contracts need to be drafted properly in order to ensure that both parties are protected, and there are no red flags that might expose either of the parties to a risk that might not always render the desired results.
The contract compliance auditor therefore, is appointed with the task of revisiting the company’s contracts, hereby ensuring that there is nothing questionable within these contracts.
Contract Compliance Auditor
The Contract Compliance Auditor is responsible to delve into contract management and work alongside government agencies, contract holders, and other related parties in order to gather reasonable assurance, that all the government standards and laws are duly met pertaining to contract creation, and subsequent fulfillment.
The Contract Compliance Auditor is mainly entrusted with the responsibility of ensuring that that the contracts that are drafted by the companies are in proper compliance with the set rules and regulations.
Therefore, it can be seen that they are supposed to cover aspects that can act as blueprints for efficient contract delivery.
The Contract Compliance Auditor should undertake the following features for better result outcomes.
- Achieving Maximum Value for the Contracts: This tends to be a very major objective for such audits because of the fact that there are certain terms and conditions within the contract that somewhat limits the extent to which juice can be milked from the contract. Therefore, as a Contract Compliance Auditor, this tends to be a primitive goal, to act on behalf of the auditor.
- Mitigation of Risk: Compliance Auditor is also supposed to ensure that the contract has a limited risk that can easily be identifiable. It should also be in line with the inherent risk-return tradeoff that exists within the company. Risk identification and subsequent mitigation are also something that needs to undertaken by the respective compliance auditor.
With these objectives in mind, the Contract Compliance Auditor should ideally plan the audit in accordance with the parties involved, and the ultimate goal that needs to be extrapolated as a result of the audit.
Since it is a compliance-based audit, it can be seen that there is a need to ensure that the underlying contract does not intersect the set rules and conditions in the existing state of affairs, and the legislation set out within the country.
In the same manner, it is also important to consider for the compliance auditor to establish cordial collaboration, and execution plans relating to the audit.
This is mainly about research within the organization, as well as having a proper idea regarding the broader laws that need to be followed.
Knowledge about these aspects is quite important because of the reason that it helps to identify the existing issues within the contract, and what needs to be done in order to ensure that the relevant issues are duly resolved.
Therefore, there is no doubt to the fact that contract compliance auditor tends to be rudimentary for organizations in order to safeguard themselves against penalties, frauds, and subsequent financial losses.
Hence, it can be seen that contract compliance should be taken seriously from the organization’s perspective. Even from the perspective of the auditor, it is an increasingly important task because of the responsibility involved.
Regardless of the intensity of the work that contract compliance requires, there are numerous contingencies involved within contracts that should be highlighted by the auditor.
These compliance-related issues can stem from policies within the company, as well as rules and regulations that are set out for company-related contracts by the respective government.
Hence, with these objectives and requirements in mind, contract compliance auditor is supposed to study the company, as well as potential areas of improvement that can enable companies to get better results from contracts.