Which Businesses Get Audited?
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What Audits Target Your Business?
It’s not only large multinationals that face audits — even small e-commerce businesses that send out a handful of packages everyday run the risk of getting audited. Audits can be financial, tax related, customs, freight, regulatory, operational, etc. the scope and triggers differ from industry to industry. It depends on what type of industry you are involved in, what type of transactions you are processing, and what type of contracts you have.
Published: 2026-01-19
“This content is informational only and should not be interpreted as financial or operational advice. Shipping outcomes depend on carrier policies and business conditions.”
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Why audits matter to you
Audits help regulators, carriers, customers, and partners verify that your reporting, billing, compliance, and controls are accurate. For logistics and shipping specifically, audits can recover overcharges, confirm regulatory compliance for cross-border trade, and identify process gaps that increase costs or expose you to penalties. If you run shipping operations, you should view audits as a risk-management and optimization opportunity rather than just a compliance burden.
Types of audits that may affect your company
You’ll likely encounter several audit types depending on your business activities. Each has a different scope and typical objectives.
Financial and External Audits
All financial and external audits seek to understand a company’s financial statements and accounting practices. Publicly traded companies will have external independent audits done on them routinely. Private companies will also get audited when they seek financing, or when there are investor due diligence or acquisition activities that involve audits.
Tax Audits
The tax authorities will want to receive documentation showing that the company has accurately reported its income and aligned its tax payments and expenses properly. Shipping and logistics expenses are often the target of audits due to the complicated ways they can be allocated, coupled with cross-border taxes and different treatments based on the locality of taxes..
Customs and Trade Audits
If your company obtains, or even exports, items, be aware that customs organizations (for example, U.S. Customs and Border Protection or CBP) have the right to audit you on the classification, valuation, country of origin, and adherence to import/export regulations. Audits of this type can lead to penalties, changes to the duties owed, or custom procedures that may need to be documented.
Carrier and Freight Audits
Audits can also be done by the carrier (for example, UPS or FedEx), the customers, or third-party audit companies, and they involve analyzing the shipping invoices and contracts to verify that the stated rates, accessorials, fuel surcharges, and billing are done correctly. Providers of freight audit and payment services also conduct reconciliations on a regular basis on the behalf of shippers.
Regulatory and Compliance Audits
These audits include checks on areas such as hazardous materials transportation, security programs, and anti-bribery controls for international trade.
Internal Audits
Within your internal audit function, there may be an examination of operational, financial, and compliance functions — including logistics and shipping — for the purpose of pinpointing shortcomings and proposing enhancements.
Supplier and Third-Party Audits
Customers or partners may perform an audit of your shipping or 3PL processes in order to validate the attainment of service-level agreements (SLAs) and the compliance (e.g., chain of custody for regulated goods) associated with them.
Which Companies Are More Likely to Be Audited?
You may assume big corporations are the only ones chosen for audits, but there are a number of company attributes that increase the likelihood of audits occurring. The table below provides a description of the various company types and what audits they can expect.
| Company type | Typical audits to expect | Why you might be targeted |
|---|---|---|
| Publicly traded companies | Financial, internal controls (SOX), tax | Regulatory requirements, investor oversight |
| Large importers/exporters | Customs/trade, tax, supplier audits | High volume cross-border transactions; duty exposure |
| 3PLs and freight forwarders | Carrier audits, compliance, financial | They act as intermediaries with many billing flows |
| E-commerce retailers | Carrier/freight audits, tax, internal | High parcel volumes, returns, marketplaces |
| Small businesses shipping domestically | Carrier audits, tax | Mistakes in billing or tax filings can trigger checks |
| Companies using bonded warehouses/FTZs | Customs/trade, compliance | Special customs regimes come with audit rights |
| Freight brokers | Regulatory, financial | Broker bonds, revenue recognition, carrier payments |
| Regulated industries (pharma, defense) | Regulatory, supplier, customs | Stringent controls and security requirements |
| Companies with complex contracts | Contractual audits, supplier audits | Pricing, rebates, accessorials, service credits are complex |
Common triggers that make you more audit-prone
Knowing what triggers audits allows you to prioritize what you want to prevent.
- Large or unusual transactions (big shipments, sudden spikes)
- Frequent amendments to customs entries or valuation changes
- Repeated billing disputes with carriers or vendors
- Material discrepancies between reported and actual inventory, freight costs, or revenue
- High rates of returns or chargebacks in e-commerce
- Use of tax credits, exemptions, or special duty programs without supporting documentation
- Significant changes to vendors, pricing, or contract terms
- Random sampling by regulators or customer-driven audits
The audit lifecycle: what you should expect
Audits usually follow a pattern. Being prepared for each stage reduces stress and speeds resolution.
- Notification: You’ll typically receive a formal request or notice. For customs audits, this may be a demand for documents; for carrier audits, it can be an invoice review.
- Scope definition: The auditor defines timeframes, transaction types, and documents required.
- Document collection: You (or your 3PL) produce records, invoices, bills of lading, customs entries, and system logs.
- Testing/analysis: Auditors sample transactions, check calculations, and evaluate controls.
- Findings: Auditors report discrepancies, potential liabilities, or recommendations.
- Response & remediation: You provide explanations, corrective entries, or process changes. For carriers, adjustments may result in credits or recoveries.
- Closure & follow-up: The audit is closed, sometimes with monitoring or follow-up actions.
Shipping and Logistics Audits: What You Need To Consider
Complex logistics data has a lot of moving parts; from data from different parties to variable charge lines to constant changes. Below are some specific focus areas you geared audits should pay attention to.
Accessorials and Freight Charges
While auditing, focus on whether the accessorial charges (address correction, residential delivery, liftgate, etc.) were implemented and supported by service.
Rate Application and Contract Compliance
Auditors analyze volumes, discounts, and rates from the contract to adjust them to see if they’re consistent across the invoices.
Billing Class and Dimensional Weight
There are big differences in charges if dimensions are not measured correctly and if the class of freight, or class of commodity, etc. has been incorrectly assigned or not.
Changes to Tariffs and Fuel Surcharges
Surcharges are updated often. Auditors check to see whether the current surcharge is consistent with the carrier’s published schedules to see if the tier changes are consistent with tariffs.
Late Charges and Duplicates
Duplicates and late invoices are transparent losses that audit companies look for and can easily be repaired.
Chargebacks and Claims Management
Missing audits often have linked loss or damage claims, and loss audit checks the settlement, documentation, and the claims process.
How To Detect Shipping Billing Errors
Constantly assessing the process leads to reduced revenue loss, streamlining operations, and less friction. Below are some of the most common billing errors and how to detect them.
| Error | How it happens | Detection / Prevention |
|---|---|---|
| Duplicate charges | Duplicate invoice submission or adjustments | Reconcile invoices to carrier remittance; use invoice-matching software |
| Wrong service level charged | Misapplied service codes or human error | Audit service codes against tracking events |
| Incorrect weight or DIM | Poor measurements, system data entry | Enforce standardized measurement processes; scale/DIM integration |
| Wrong freight class | Misclassification of commodity | Maintain a central classification database and sample audits |
| Unapplied contract discounts | Rate loading or system mapping errors | Periodic contract-to-invoice reconciliation |
| Unauthorized accessorials | Manual add-ons without proof | Require PODs and service logs before payment |
| Fuel surcharge miscalculation | Version mismatch between invoice and tariff | Automate surcharge calculations from carrier postings |
| Late fee or interest mis-billing | System timing differences | Track billing timelines; require documentation for penalties |
What You Must Know Regarding Customs and Cross Border Logistics
If you engage in import and/or export activities, you run the risk of being audited for regulatory compliance, as there is a heightened risk of regulatory audits with the movement of goods across borders. You need systems in place for a strong compliance with applicable customs regulations.
Popular areas for customs audits
- Classifying your items under correct HS codes
- Using the correct methods for customs value determination (transaction value vs deductive/ computed)
- Confirming country of origin and preference claims
- Correctly applying duty drawbacks, bonded warehouses, or free trade zones (FTZs)
- Keeping import entries, commercial invoices, and bills of lading organized
Customs will ask for these items
Customs will ask for commercial invoices, packing lists, purchase orders, supplier invoices, shipping instructions, bills of lading, and proof of the value and origin that you declared.
How CBP and other authorities operate
Customs may use systems such as CBP’s Automated Commercial Environment (ACE) to analyze and examine records for compliance. They may take a closer look through the records and make selective audits for accounts or types of cargo. Original documents may be requested, and you may have to prepare balancing documents.
The cross-border complexities you should manage
- Indirect shipments and drop-ship models complicate determining who the importer of record is.
- Returns and repairs can adjust duty rates and may need to be documented specially.
- There may be potentially damaging liabilities related to anti-dumping and countervailing duties (AD/CVD) that may apply retroactively.
- Preferential duty claims (such as under USMCA) will need more documentation coming from your suppliers.
How to prepare your company for audits
Proper planning more efficient, and ensures a quicker resolution and typically enhances the operational performance.
Build and Preserve Robust Documentation
You should keep comprehensive records of:
- Charges of lading, bills of airshipping, and tracking information
- Commercial invoices together with purchase orders
- Contracts with carriers and third-party logistics providers
- Customs entries and documentation from brokers
- Proof-of-Delivery (POD) and exceptions to POD
- Internal pricing sheets and matrices
Retention policies must align with regulatory standards. Customs, for example, can require retention for several years.
Establish Distinct Internal Controls
You should develop distinct internal controls for changes to pricing, inclusion of new carriers, acquisition of invoices, and updates to classifications. When possible, split and segregate these duties (those who file customs entries should not be the same as those who approve payment).
Employ Technology to Establish an Audit Trail
You should use systems that record changes, note timestamps, and preserve older versions of documents. For improved matching, use integration with carriers’ tracking APIs and invoices to your Transport Management System (TMS) or Enterprise Resource Planning (ERP).
Internal Audits and Frequent Reconciliations
Establish a schedule for audits of freight that are internal, monthly or quarterly. Reconcile loaded volumes, contractual rates, and service events against invoices from the carriers.
Define and Test High Risk Areas
Direct your efforts on auditing to the areas that provide the most value or the greatest risk, including High-Value SKUs, costly lanes, Returns Processing, and accounts with carriers that are high-traffic.
Update Your Customs Compliance Regularly
You should keep records of your declarations with suppliers, properly assigning method(s) of valuation, and investigating the HTS for new products.
Best Practice for Responding to Audits
Make sure you take quick and organized action as the audit begins.
- Make sure you understand the notification to make sure you understand the scope and the deadlines.
- Create a small team to respond and assign each member a specific role (logistics lead, finance, customs broker, legal).
- Prepare the documents you need to respond to the audit and prepare organized and indexed packets.
- Make sure your responses are professional, factual, and documented.
- If you find that you disagree with the audit findings, make sure you present the evidence and calculations that support your claim.
- If you find that some of the findings are valid, take the corrective actions and make sure you track the remediation.
Post-Audit: Remediation and Valuable Lessons for the Future
After an audit, you should prioritize corrective measures that reduce future exposure.
- Make sure you focus on the corrective actions that limit exposures for the future after the audit.
- Make sure you revise your policies and the standard operating procedures (SOPs).
- Make sure you educate your personnel on the rules for classification, measurement, and documentation.
- Make the necessary adjustments to the system mapping so that contract rates and tariffs are applied accurately.
- Make use of the audits to negotiate more favorable terms with your carriers or for the recovery of claims.
- Enhance the control that you have over your vendors and suppliers regarding the accuracy of the origin and invoice.
How to Reduce Liability from Audits
Make sure you focus on the corrective actions that limit exposures for the future after the audit.
- Make sure that the master data and classification for shipping are standardized and consolidated.
- Implement the use of freight payment and audit software or third-party audit partners for ongoing monitoring.
- Periodically review carrier compliance and clarify ambiguous terms of your contracts to make sure they are favorable.
- Use data analytics to identify variances: spikes in accessorials, sudden changes in DIM, or lane specific shift patterns.
- Nurture working partnerships with customs brokers and document standardization.
- Make certain your ERP/TMS integrations eliminate unnecessary data inputs and minimize inaccuracies.
How Betachon Shipping Solutions integrates with your optimization and audit workflows.
For those managing large scale shipping across the United States and Canada, the ability to identify billing discrepancies and hold carriers accountable is invaluable. Betachon Shipping Solutions offers services that aid in both audit prevention and recovery.
- Premium Shipping Programs: Streamline service levels to ensure consistent application of the correct rate and service codes.
- Carrier Rate Optimization: Assists in aligning contract rates to invoices and identifying discounts that were misapplied.
- International Shipping: Support with customs documentation and cross-border compliance to mitigate audit risks.
- Audit & Claims Management: Systematic process for invoice audits and claims to recover overpayments and rectify inaccuracies.
For help in pinpointing patterns that elevate audit risks or for implementing shipping systems with scalable merit that provide audit trails, you can reach out to Betachon.
Practical examples and scenarios you may face.
This section outlines realistic scenarios you may encounter, along with explanations of how these scenarios are typically resolved.
Scenario 1: Surprise customs duty assessment
You collect invoices from your suppliers, and the commercial and origin invoices. You partner with your customs broker to prepare documentation. In the case of misclassification, you may owe duties and interest, and then tighten your SKU classification checks.
Scenario 2: An invoice from the carrier contains several duplicate charges
Your finance staff spot duplicate items in different invoices. You take the freight audit and apply automated invoice-matching tools to identify and remove duplicates. You submit the carrier a consolidated dispute and obtain credits. You then set a rule in your system to identify duplicates before a payment is processed.
Scenario 3: A lane with significant accessorial charges.
You identify a lane with pronounced liftgate and residential delivery charges. You analyze the PODs and record the tracking events. You find that delivery type misclassification stemmed from bad address data, and you set order-entry address validation to limit future accessorials.
WHAT AUDIT TECHNOLOGIES TO EMBRACE
Technology reduces manual work and improves defensibility.
- Freight audit and payment platforms: automated reconciliation, duplicate detection, contract mapping.
- Transportation Management Systems (TMS): centralized shipment data, routing rules, and carrier integrations.
- Customs management software: ACE integration for entry filing and record-keeping.
- Document management systems: searchable, timestamped storage for invoices and PODs.
- Business intelligence and anomaly detection: dashboards and alerts for outlier behavior.
Collaboration with Auditors and Choosing External Assistance
Engaging external auditors or consultants may be necessary, so here are tips
- Audit partners should have logistics and customs experience, not just general accounting firms.
- Check their method and data protection standards.
- For customs, considering contingency-fee freight audit firms for overcharge recoveries is fine, but be mindful of costs and timelines.
- For customs, work with brokers and trade lawyers familiar with CBP and ACE.
Possible audit results and what you stand to lose
An audit can show no findings, recoveries (credits), recommendations for process changes, or penalties. Common results include:
- Credits from carriers due to billing mistakes
- Customs adjusted duty refunds or assessments
- Repayment of tax credits or amended returns
- Administrative recommendations to enhance control and record keeping
- Rarely, civil fines for willful non-compliance
What you should review and use
Consulting authoritative sources is key to dealing with audits or improving your shipping compliance:
- Carrier contract and dispute resolution (So FedEx and UPS have billing and claims guides)
- U.S. Customs and Border Protection (CBP) and resources for Automated Commercial Environment (ACE)
- Best practices and trends for trade and supply chain (industry publications and trade associations)
(For your research, reference the carrier and CBP policy web pages to find up to date policies.)
Shipping audits checklist
To help you become prepared for an audit, we have prepared this checklist.
| Action | Frequency |
|---|---|
| Reconcile carrier invoices to TMS/ERP | Monthly |
| Run automated freight invoice audits | Ongoing |
| Confirm HTS codes and supplier origin documentation | When onboarding SKU or supplier |
| Centralize and back up shipping documents (PODs, BLs, invoices) | Ongoing |
| Conduct internal shipping process audits | Quarterly |
| Train staff on measurement and classification | Annually or on new hires |
| Review carrier contracts and rate loadings | Annually or at renewal |
| Test controls around invoice approval and payment | Quarterly |
Risk management and continuous improvement
Audit findings are feedback. Use them to adjust SOPs and order more tech integrations and other error avoidance tools. You will reduce the cost and frequency of audits and improve relationships with carriers and customs.
Final tips
- Think ahead: self audits can be less expensive than external audits.
- Build traceability: change logging systems help you respond more quickly.
- Look at audits like opportunities: get back overpayments and lose less control.
- Keep working with carriers and brokers: working together to solve disputes often helps get refunds quickly.
- Think about getting experts for specific areas: customs valuation, AD/CVD coverage, and other international complexities are often specialty areas that need help.
If you want help implementing scalable shipping controls, running freight audits, or improving cross-border compliance, Betachon Shipping Solutions can assist with operational strategies and audit & claims management. Contact support@betachon.com or call 888-486-9798.
This is not operational or financial advice. These are suggestions only. Your shipping will depend on the carrier and your business.
