The American Institute of CPAs (AICPA) has launched a new risk reporting framework, SOC for Supply Chain, to help manufacturers, producers and distribution companies to identify, assess and address supply chain risks.
The SOC for Supply Chain is a voluntary framework for organisations to communicate certain information about their manufacturing, production or distribution system and the effectiveness of controls that mitigate supply chain risks.
AICPA vice president – assurance and advisory innovation – Amy Pawlicki said: “Today’s supply chains are highly sophisticated and complex, there is often a high level of interdependence and connectivity between them, which increases an organisation’s vulnerability to risk”
“Our new SOC for Supply Chain framework can help an organisation assess risk, understand the effectiveness of its controls and identify shortfalls.”
The new framework allows organisations to have an examination engagement performed of their manufacturing, production, or distribution system. This type of audit provides a CPA’s opinion on the organisation’s description of the system it uses to manufacture, produce or distribute products and an opinion on the effectiveness of the controls within that system.
AICPA associate director – attestation methodology and guidance – Mimi Blanco-Best said: “This framework is a vital step in helping companies that manufacture, produce, or distribute products explain how they are managing risks in their supply chains.
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“We believe investors, boards, audit committees, customers and business partners will see tremendous value in gaining a better understanding of how those companies are managing their supply chain risks. Combined with the CPA’s opinion, this will increase stakeholders’ confidence in a company’s due care and diligence.”