ERP Audit Consultant, Iraq

A system review, not an audit of the accounts

In Iraq, the word audit usually brings to mind the external auditor, a partner's audit team or a client's cost review. My work is different, and I make that clear before it starts. I review the ERP as a working tool: whether it is set up to match how your business operates, whether its data holds together, whether its controls do what owners believe and whether people actually use its reports.

I do not express an opinion on financial statements, I do not advise on tax and I do not deal with any authority on your behalf. Your external auditor and local accountant keep those responsibilities. What the review gives them is useful evidence: advances that have stayed open for a long time, users with rights in an entity they do not work for, retention balances that disagree between finance and the contract file.

The review suits an Iraqi group when:

• An international partner or main contractor questions the reliability of cost reports.
• Owners suspect project margins in the system are flattering or understating reality.
• A second entity, new region or large contract is about to be added.
• The original implementer is no longer involved and nobody is sure how the system was set up.

My general approach is laid out on the ERP health check page.

Cash advances, retentions and project costs

Iraqi contractors and oilfield service firms often move a great deal of money through people rather than bank accounts. Advances go to site managers, local purchases are paid from storekeepers' floats, part of a subcontract may be settled in cash, and dinar costs are booked against contracts denominated in dollars. If those flows sit outside the ERP, project costs and supplier balances will never be quite right.

The audit samples these flows and follows them through the system:

• Advances issued to named staff: are they recorded against a person and a project, cleared by receipts and returned or closed?
• Petty cash at each site and in each currency: are counts recorded and limits respected?
• Subcontractor bills: does each one rest on work that was measured and signed off, and does the system hold back retention and release it later?
• Purchase requests and site receipts: do they carry a project and cost code from the start, or are costs assigned later at head office?

I compare retention receivable and payable with the contract files kept by project managers, and project cost to date with what finance reports. Where figures disagree, I trace the difference to a cause such as a missing code, a late entry or a manual allocation. The contracting ERP and project costing pages describe the target process.

Dinars, dollars and entity boundaries

Most Iraqi groups that run an ERP trade in both Iraqi dinars and US dollars. Contracts, imports and some salaries may be in dollars while local purchases and many receipts are in dinars. An ERP handles this well only if each transaction keeps its original currency and amount, uses the rate finance intends and is revalued consistently.

I recompute a sample of transactions across a period: a dollar contract invoice settled partly in dinars, an import payment, a site expense, a payroll journal and month-end revaluation of open balances. For each, I check the stored amount, the rate and the result against finance's expectations, then compare key reports with finance's own figures in both currencies.

Entity separation gets the same attention. Where a group trades on both sides of the federal Iraq and Kurdistan Region divide, it often holds separate companies with their own registrations, banks and accountants. I check that users only see and post to the entities they work for, that document numbering is separate where it should be, that shared customers and items are shared on purpose and that intercompany charges such as equipment hire or staff recharges are recorded on both sides. Gaps here can make consolidated reports unreliable and confuse each entity's local accountant. Design guidance for this lives on the multi-company ERP page.

Connectivity, offline entry and access rights

Sites, camps and warehouses in Iraq may work with limited or intermittent internet, and power is not always stable. Some companies use mobile or offline capture for receipts, issues and timesheets; others send paper forms to head office for entry. Each approach leaves its own traces in the data.

With your IT lead and site representatives, I review how entries from weak-signal locations reach the system. I look for duplicates created when a sync is retried, gaps in document numbering, receipts entered long after the goods arrived and stock movements that appear in bulk at month-end. I also review the hosting arrangement, whether any backup has actually been restored in a trial, who holds administrator access and whether anyone outside the original implementer could restore service.

Access rights are reviewed against a simple matrix of who should create suppliers, approve purchases, release payments, issue advances and post manual journals. Conflicts are listed by name, along with shared site logins, accounts belonging to staff who have left and implementer accounts still active. Where one storekeeper can both receive and issue stock without review, or one accountant can create a supplier and pay it, the report says so plainly, because these are the gaps an external auditor or partner is most likely to question.

Findings, partner reports and the way forward

Owners and finance directors receive the report in English. It opens with an overall view of the system's condition and its main risks, then presents findings by area. Each finding states the observation, supporting evidence, why it matters, the probable cause and a recommended action, graded by impact and urgency.

A separate section looks at reports sent outside the company. For each joint venture partner, main contractor or international client, I compare what they receive with what the ERP can produce directly, and identify the manual steps in between. Reducing those steps is often the quickest way to make partner reporting more reliable.

The report also covers printed documents, such as invoices, delivery notes and site forms in Arabic or Kurdish, checked for data and layout issues while your bilingual staff confirm the wording, and a license review comparing paid users and modules with actual use.

I present the results online, and your implementer is welcome. Fixes can be handled internally, with your implementer or through ERP optimization. Where the evidence points to a system that never really settled after launch, see the ERP rescue consultant page for Iraq; the Iraq ERP consultant page and Iraq hub cover the wider picture.