DATAMYTE – A Banking Audit Checklist For Car Dealeragents

Compliance can easily be ensured during an audit by following a comprehensive checklist. DATAMYTE’s quality management platform with low-code capabilities enables users to easily create these checklists for auto dealership compliance purposes.

At your dealership, it may be beneficial to designate someone with in-depth knowledge of factory warranty policies to interact with auditors during audits and discuss these with them during an audit – this will often prevent charges back for unwarranted debits.

Inventory Management
As part of an inventory audit, auditors look for multiple issues such as duplicate codes, missing records and incorrect valuation. Utilizing an inventory audit checklist can assist auditors in quickly finding these mistakes before they become larger issues.

Audits can also help prevent fraud in your business. Auditing forces employees to be honest, while unannounced inventory counts make it harder for fraudulent activity to go undetected. Segregate duties to minimize the likelihood of fraud occurring – for instance by not having one person handling cash receipts and bank reconciliations at once.

Scheduling the physical inventory count at a time that will have minimal disruptions on shipping and fulfillment is also key. For example, avoid performing one in December. Furthermore, set up regular cycle counts based on trigger events to identify any discrepancies, while employing inventory audit software solutions such as jlwarranty will further help reduce full physical counts by comparing your WMS with inventory records.

Financial Reporting
Financial auditing is an indispensable process that ensures your company’s books are accurate and that the business remains solvent. Investors and lenders rely on accurate, reliable financial reports in making investment decisions and accessing capital; additionally, having a clean audit report increases confidence within a company in terms of growth potential and operational efficiencies.

Step one in preparing for a financial audit is gathering all necessary documents, such as budgets, statements, ledgers and supporting papers. For easy retrieval it is ideal that these be kept together in one folder or filing cabinet.

Once you have all of the documents needed, the next step should be reviewing them thoroughly. A careful evaluation will enable you to detect any discrepancies and address them before auditors arrive.

Customer Service
Audits consist of reviewing your service department’s warranty job cards to ensure compliance with factory policy, as well as inventory for parts inventory to assess whether your dealership meets stocking requirements for manufacturer programs.

To prevent surprises at the “exit meeting” at the end of an audit, request that any potential debit items be reviewed daily by your dealer representative. This allows them to identify missing documentation, call customers for verification purposes and seek clarification if needed before reaching a final decision to debit.

If you can provide sound arguments to defend a potential debit item, the field office may agree to either nullify it entirely or accept a lesser debt than was originally established. If this fails, audit exception may still be available as an option.

Internal Controls
Similar to a coach’s playbook, an internal audit checklist serves as an indispensable resource in ensuring the audit process is comprehensive and prevents financial fraud and errors, as well as ensures all internal control activities are adequately tested and documented.

Preventative internal controls aim to deter fraud and errors before they take place by including strict documentation practices, separation of duties and restricting physical access to inventory, cash, vehicles and other assets. Detective controls are intended as backup procedures that catch any transactions missed by preventative controls.

Dealerships must conduct internal audits regularly in order to keep their accounting functions operating efficiently. These tests should encompass a review of sales and service agreements, warranty claims and the parts scrapping area (to make sure all parts are being properly tracked). In addition, dealerships should prepare themselves by creating an environment with adequate lighting and ventilation that offers auditors an enjoyable working space.