Contract Audit

A Contract Audit is a contract review process that can be used to verify compliance with contractual terms and assess performance or financial information.

• Context:
  • It can examine and assess performance or information to verify that one or more parties to a contract have complied with requirements or standards set forth in the contract.
  • It can be conducted pursuant to the parties' agreement, as set forth in the terms of the contract, unlike audits required by law.
  • It can be used as an effective tool to control costs and promote quality.
  • It can involve examining financial records when costs are an element of the amount paid under a contract.
  • It can help ensure quality by auditing the quality of parts or services.
  • It can determine whether parties are meeting all of their contractual obligations.
  • It can be performed periodically in all lines of business to confirm that a contract's terms and conditions are being met as required.
  • It can be done at a micro-level (per contract) or at a macro-level (entire portfolio).
  • It can evaluate and verify all controls, policies, and systems related to the contract.
  • It can inspect account books, transaction records, and operation logs.
  • It can help prevent suppliers from over-billing or under-delivering to a customer.
  • ...
• Example(s):
  • Financial Audits, which enable financial compliance assessment systems.
  • Operational Audits, which enable service delivery and quality assurance systems.
  • Regulatory Audits, which enable legal and regulatory compliance systems.
  • Third-party Audits, which enable independent contract compliance assessment systems.
  • Compliance Program Audits, which enable overall compliance program effectiveness systems.
  • ...
• Counter-Example(s):
  • Internal Review, which lacks the formal structure and independent assessment of a contract audit.
  • Casual Contract Monitoring, which lacks the systematic and comprehensive approach of a contract audit.
  • Financial Statement Audit, which focuses on overall financial reporting rather than specific contract compliance.
• See: Contract Compliance, Audit Process, Contract Management, Risk Assessment, Performance Evaluation, Financial Compliance, Quality Assurance.

---

---

References

2025a

• (Auditec Solutions, 2025) ⇒ Auditec Solutions. (2025). "2025 Contract Compliance Audit Guide: Types, Benefit, and Cost". In: Auditec Solutions.

2025b

• (Aavenir, 2025) ⇒ Aavenir. (2025). "Contract Audit". In: Aavenir Glossary.

2024

• (ContractSafe, 2024) ⇒ ContractSafe. (2024). "Contract Audit". In: ContractSafe Glossary.

---