Agribusiness encompasses a wide range of operations, from farming and food production to distribution, marketing, and retailing. Agribusiness is a crucial component of the broader agricultural industry, and it involves both small-scale and large-scale enterprises.
When planning the engagement for agricultural audits, the auditor should inquire about the farming procedures and become familiar with the overall operation and any unusual events and practices.

The auditor should perform the following procedures:

a) Physically observing and reviewing crop maturity and quality
b) Confirming the existence of harvested crops stored in outside warehouses
c) Reviewing and testing the capitalized costs of growing and harvested crops for reasonableness
d) Determining that capitalized costs of crops do not exceed market
e) Reviewing records of ownership to determine the ownership of the land.

However, the technological advancements play a crucial role in enhancing the accuracy, efficiency, and scope of audits in the agribusiness sector.

Here are some ways in which technological advancements enhance accuracy in agricultural audits.

1. Data Analytics and Machine Learning – This can help the auditor analyze large sets of agricultural data quickly and identify anomalies or patterns.

2. Blockchain Technology – This can help the auditor enhance transparency and traceability in the supply chain. Each transaction or data point can be securely recorded in a decentralized ledger, ensuring data integrity, and reducing the risk of fraud.

3. Mobile Applications – An agribusiness enterprise that uses mobile applications to store data can help the auditor access this data in the system hence ensuring data accuracy.

4. Internet of Things (IoT) – Implementing IoT devices such as sensors and drones can provide real time monitoring of various agricultural parameters like soil moisture, temperature, and crop health. This can be collected and analyzed to access compliance with agricultural practices.

With the data-driven audit and technological advancements, integrating these technologies in agricultural auditing processes can become more streamlined, transparent, and data-driven, ultimately contributing to improved sustainability and compliance within the agricultural sector.

Henry Gitau – Auditor

Share this page


Was this article INSIGHTFUL?