Which of the following best describes the purpose of contract audits?

The purpose of contract audits fundamentally revolves around evaluating compliance with contract terms. This process involves a thorough examination of whether both parties involved in the contract are adhering to the agreed-upon terms and conditions. Contract audits assess various aspects such as financial obligations, performance standards, and compliance with regulatory requirements. By evaluating compliance, organizations can identify any discrepancies or issues, ensuring that contractual obligations are met and reducing the risk of disputes.

While there are other important functions in contract management, such as ensuring contracts are valid, finding suppliers for renegotiation, or tracking project timelines, these are not the primary focus of contract audits. The primary goal is to ensure that contracts are being executed as intended and that all parties are meeting their commitments. This helps maintain a healthy business relationship and promotes accountability, ultimately contributing to successful contract management.