Auditing long term contracts

Should engagement teams audit long term contract businesses?

There are a number of broader areas for engagement teams auditing long term contract businesses to consider as part of their audits

It is vital to understand how cash and contract profitability correlate and whether there are other risks within the supply chain (e

,g,supplier finance) that require specific audit attention

What is a contract audit?

Contract audits are commonly used for maintenance and construction contracts and are frequent in government entities such as the defence contract audit agency

Contract audits also verify and evaluate current policies, systems and controls to ensure they are up-to-date and accurate

They should be a regular occurrence in any organisation

What is a practical guide to auditing long term contracts?

Practical guide to auditing long term contracts This guidance describes a number of considerations for engagement teams when planning and executing audit procedures in respect of long term contracts

Standard forward contract

In finance

A futures contract is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future

Between parties not yet known to each other.The asset transacted is usually a commodity or financial instrument.The predetermined price of the contract is known as the forward price.The specified time in the future when delivery and payment occur is known as the delivery date.Because it derives its value from the value of the underlying asset

A futures contract is a derivative.