Contract auditing

Contract auditing involves an examination of the written arrangements with suppliers. The intent behind a contract audit is to ensure that the amount and quality of goods and services delivered to the customer was correct and that the customer was billed an appropriate amount. A possible result of a contract audit is that the supplier is required to deliver additional goods and services, or that it must rebate a portion of its billings. The threat of a contract audit is a useful deterrent to keep suppliers from overbilling or under-delivering to a customer.