Article by: Glenn Shearron, Trade Compliance Specialist, TradeInsights, ECoP

Are you conducting internal audits? Post transaction audits are extremely important to importers and exporters and are the cornerstone for a successful compliance program. An internal audit can reveal gaps in your processes and identify weak areas that present compliance risks and possible violations. Some key components to your internal audit should be:

• Identify the areas and business units to be audited
• Prepare template documents such as interview question, checklists, audit report forms, etc. beforehand
• Make a list of all personnel that will need to take part in the audit process
• Identify the gaps and weak areas of your business
• Write your draft report
  • Summary
  • Findings and recommendations (in priority order)
  • Append all documents used in the audit process
• Conduct a post audit briefing to discuss the findings and recommendations
• Obtain commitment from all business units involved to follow through with any corrective actions
• Brief executive management of all audit findings and results
• Provide audit findings to legal counsel (if this is in your SOP)
• Set completion dates for any corrective actions and track to completion
  • Audit the corrective action to ensure they have resolved the issue

If your audit finds violations, your next call may be to your legal counsel. You should never report a potential violation to the government directly. Turn all your audit findings over to your legal counsel and allow them to prepare and submit any disclosure(s).

One thing is certain, not conducting an internal audit is very short-sighted, and is an indefensible excuse to any government agency. As discussed, internal audits can shine the light on gaps and weak areas in your company, as well as violations. Having this documented, putting in place corrective actions, and testing those corrective actions for effectiveness can be big mitigating factors to any potential penalties.

At TradeInsights, we assist our clients with the implementation of internal auding programs, as well as providing external auditing services. Please reach out to us and we will be happy to assist you.

Please contact your V. Alexander account team, or you may also contact our Trade Compliance team at tradeinsights@valexander.com with any questions.