Chain of Custody Credit Allocation Ledger Audit Procedures
Verify credit allocation ledgers by auditing dock scale moisture corrections, empirical conversion yield factors, and the rolling 24-month expiration limit.
Product Group Definition
Classification Rule
Material categorization specifications established by chain of custody standard setters group paper and paperboard items sharing similar input materials, manufacturing sites, and output claim types. Under custody systems like those of the Forest Stewardship Council, a product group definition delineates the physical boundary within which a manufacturer calculates certified fiber percentages or manages credit system balances. The classification prevents companies from transferring sustainability credits derived from premium virgin pulp grades to unrelated grades like unbleached containerboard or mechanical print stock.
The grouping binds all production lines and warehouse systems within an audited facility.
Allocation Boundary
Management systems calculate input and output volume reconciliations exclusively inside the parameters of the designated group. A credit account generated by sourcing certified chemical pulp cannot offset non-certified fiber in a recycled board product group. Facilities must establish separate groups whenever manufacturing processes, certification claim types, or species compositions diverge beyond standard accounting rules.
Material Grouping
Defining a group requires documenting exact trade names, component raw material specifications, applicable certification claims, and physical processing steps. Auditors verify that physical inputs match the declared product category during annual surveillance inspections. Improper grouping creates material non-conformities that invalidate commercial chain of custody transactions.