Marketplace Sales Audit Checklist for Statutory Auditors in India

Start with the commercial terms and the accounting model

Before testing numbers, understand how the brand sells. Is it a seller of its own inventory on the marketplace, or are goods supplied under a different arrangement? The model decides who raises the invoice, when control passes and what the brand records as revenue, so confirm it against the contract.

• Seller agreement and rate card: obtain the signed version and every later amendment. Commission, fixed fees, shipping fees, return fees and payment terms all come from here.
• Revenue policy: check that the brand recognises revenue consistently with the applicable accounting standard, and that the policy covers returns and discounts.
• Fee changes during the year: marketplaces revise terms. Do not assume a rate. Confirm the latest terms from the agreement and the marketplace's published notices.

Collect the right evidence set

Ask management for marketplace-generated reports, not spreadsheets rebuilt by the finance team. Reports downloaded directly from the seller panel carry more audit weight.

1. Order-level sales report for the full year, including cancelled and returned orders.
2. Settlement or payment reports with the deduction breakup per order or per cycle.
3. Returns, RTO and claim reports, including any compensation for lost or damaged goods.
4. Marketplace invoices for commission, fees and advertising, with GST details.
5. Bank statements for the receiving account.
6. Tax statements: GST TCS credit details and income-tax TDS entries as they appear on the portals.

Reconcile sales to settlements to bank

The core test is a three-way tie-out: ledger sales, marketplace sales and settlements, and bank credits. Differences are normal because of timing, but each one should be explained.

• Match gross sales per ledger to the marketplace order report. Investigate orders booked but absent in the report, and the reverse.
• Match settlements per marketplace reports to bank credits. Note any credits that cannot be linked to a settlement cycle.
• Prepare a bridge: sales, less returns, less commission and fees, less tax deductions, equals expected receipt, compared with actual receipt.
• Age the marketplace receivable. Old balances often hide disputed deductions, unclaimed returns or write-offs not yet booked.

Validate commissions, fees and deductions

Expense testing is where leakage shows up. Select a sample of orders across categories and months, then recompute charges using the agreed terms.

• Recompute commission and fees on the sample using the rate card from the agreement. Do not use rates from memory or from another brand.
• Check that fee GST is booked correctly and that input credit claimed matches the marketplace invoices.
• Look for deductions with no contractual basis, such as unexplained penalties, duplicate charges or fees on cancelled orders.
• Confirm whether advertising and promotion charges are netted in settlements or billed separately, and that both are expensed in the right period.

Test returns, cancellations and year-end cut-off

Returns are the most common source of overstated revenue in ecommerce audits. Check them in both directions.

• Post year-end returns: review returns and credit notes in April and the weeks after for sales booked before 31 March. Decide whether a provision is needed under the brand's policy.
• Provision method: ask how the returns provision was derived, and test it against actual return data from the marketplace report.
• Cut-off: compare dispatch or delivery dates with the revenue booking date for the last and first few days of the year.
• Recoverable claims: check whether lost, damaged or wrongly returned goods have claims raised, and whether any recovery is recognised only when it is virtually certain.

Match tax statements and flag disclosures

Marketplace operators deduct or collect taxes on behalf of sellers. Compare what was deducted in settlements with what appears on the tax portals.

• Compare GST TCS shown in settlement reports with the credit reflected in the brand's electronic cash ledger, and check that it has been used or carried forward properly.
• Compare TDS deducted by the marketplace with Form 26AS or AIS entries, and note differences for follow-up.
• Reconcile reported turnover in GST returns with books. Explain differences arising from returns, timing or cancelled orders.
• Applicable rates and thresholds change. Confirm current provisions with the tax adviser rather than relying on older audit files.

Tools such as MarketplaceMetrics by Fundle can pre-build the sales, settlement, fee-check and returns trail, which shortens sampling, though the auditor still needs to review source reports.