Settlement Audit is a post-event verification and evaluation procedure in foreign trade practice for claims and settlement cases. It usually occurs after the buyer files a claim and the seller or insurance company completes preliminary payment, and is conducted by the company's internal audit department or a third-party institution to systematically review the compliance of the claims process, accuracy of amounts, sufficiency of evidence, and attribution of liability. Use scenarios include: review of indemnity under export credit insurance, final settlement of cargo damage claims against carriers, and account reconciliation after buyer and seller reach a compensation agreement on quality disputes. Precautions: Settlement Audit must be independent of the original claims handling team to avoid conflicts of interest; focus should be placed on document consistency (such as bills of lading, inspection reports, invoices), whether the compensation calculation complies with contract or letter of credit terms, and whether there is risk of duplicate claims or fraud. Unlike 'claim review,' which focuses on ex-ante assessment of the reasonableness of a claim, Settlement Audit emphasizes ex-post review and compliance verification of settled claims; compared with 'financial audit,' Settlement Audit focuses more on specific loss events under trade rather than the company's overall financial condition.
📝 Examples
1. After the export credit insurance claim was settled, the company's internal audit department conducted a settlement audit and found that some loss supporting documents lacked the carrier's signature or seal, resulting in the recovery of the indemnity. (Note: The settlement audit identified documentary defects that affected the validity of the final payment.)
2. In response to the buyer's quality claim, the seller commissioned a third party to conduct a settlement audit before paying the indemnity, and only after confirming that the liability proportion and amount calculation were correct did it complete the final settlement. (Note: The settlement audit serves as a risk control step before payment to ensure accurate compensation.)
💡 Foreign Trade Tips
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