Audit of
Logistics
Industry
Regienald G. Obiña, CPA
NATURE OF LOGISTICS INDUSTRY
NATURE OF LOGISTICS INDUSTRY
● The advancements of new technologies and improved business processes have
had an enormous impact on transforming both the logistics industry and transport
industry.
● Technologies have allowed real-time monitoring of flow and resources,
transparency across multiple points and the seamless exchange of
operational information with key performance indicators that have had a
profound impact on the industry.
● In this highly competitive market both information and physical products must
move with efficient speed and at lower cost, paired with improved
service.
● Successful supply chain management and logistics are often the difference
between surviving and flourishing in the current marketplace.
● Upon improving the supply chain will see immediate benefits in terms of lower
costs and optimized delivery.
NATURE OF LOGISTICS INDUSTRY
DEFINING TRANSPORTATION
● The movement of people, animals, and goods from one location to
another.
● These modes of transport may include air, rail, road, sea, cable, pipeline
and space.
● This field is divided into infrastructure, vehicles, and operations.
● Transport is crucial as it enables trade and communication between one another,
which ultimately establishes civilizations.
NATURE OF LOGISTICS INDUSTRY
TYPES OF TRANSPORTATION
1. Truck Freight — Road Transportation
2. Ship — Marine Transportation
3. Train — Rail Transportation
4. Plane — Air Transportation
5. Intermodal Transportation – uses combination of different transportation modes
NATURE OF LOGISTICS INDUSTRY
LOGISTICS
● Includes the process of planning, implementing, and
controlling procedures for the EFFICIENT and
EFFECTIVE transportation and storage of goods.
● This includes services and related information from
the point of source to the point of consumption for
the purpose of fulfilling and conforming to
customer requirements
NATURE OF LOGISTICS INDUSTRY
MAIN DIFFERENCE BETWEEN LOGISTICS AND
TRANSPORTATION
● Transportation is a function within the logistics
industry operations.
● It is focused purely on the definition and deployment
of transportation modes, such as sea, road and air.
● Logistics requires PLANNING, whilst transportation
is the mode to execute the planning when freighting
goods from point A to B.
● Transportation is just simply a part of logistics
NATURE OF LOGISTICS INDUSTRY
WHAT LOGISTICS EXECUTIVE MUST DECIDE BEYOND THE MODE OF
TRANSPORTATION
● Packaging
● Containerization
● Documentation
● Insurance
● Storage
● Importing and Exporting Regulations
● Freight Damage Claims
● Working and collaborating with other executives within the supply chain
● Managing vendors and partners
● Responsible for risk mitigation
NATURE OF LOGISTICS INDUSTRY
THREE LOGISTICAL PROCESS (A.K.A 3 Supply
Chain Directions)
● Inbound Logistics – refers to the movement of goods between
business and their suppliers
● Outbound Logistics – pertains to the flow of goods between
companies and the end-user/consumer
● Reverse Logistics – Products movement from the
end-user/consumer back to the manufacturer or reverse supply
chain. (Example: RETURNS)
NATURE OF LOGISTICS INDUSTRY
NATURE OF LOGISTICS INDUSTRY
7 Rights of Logistics
● Right Product – product should be the same as what the customer has ordered.
● Right Quality – The quality of the product should satisfy the customer.
● Right Quantity– Ensure that the volume a customer has ordered is complete.
● Right Price – Payment done for the valued customer receives with procuring a product or
service.
● Right Customer – the ordered products or services should REACH THE RIGHT CUSTOMER
who requires the products or the services.
● Right Time – the product should be produced at the right time to cater the demand
● Right Place – Product should be on the right place to have a higher demand
Different Types of Logistics Company in
the PH
TOP PLAYERS IN THE LOGISTICS INDUSTRY IN THE PHILIPPINES
HOW TO AUDIT
LOGISTICS INDUSTRY?
AUDIT CONSIDERATIONS
• Ensure Compliance with the Philippine Laws
• Corporation – SEC & DTI
• Monitor the Assets and Liabilities Assertions
• Assets – Existence
• Liabilities – Completeness
• Managing Tax Risks
• Since the product will pass thru the CUSTOMS, Ensure that the VOI
(Vat on Importation is paid) and NO Facilitation Fee shall be Allowed!!
• Check the Unusual Amounts in the Sales and Expenses (Depreciation) account
that can be used for TAX EVASION! (30% overstated sales, 30% understated
expenses) *OPLAN KANDADO
• Ensure Proper Segregation of Duties (CAR)
• Payroll audit
• Transportation companies can employ a range of non-salaried employees,
such as truck drivers who are paid a set rate per mile driven or employees paid
on an hourly basis with overtime
• ENSURE IT CONTROLS with the Accounting System
