Auditing and Assurance:
Specialized Industries (Logistics)
INTRODUCTION
Founded: 2015
Founders: Jet Lee and Tony Chen
Industry: Logistics and Courier Services
J&T Express is a global logistics and express delivery company that originated
in Indonesia and has rapidly expanded across Southeast Asia and other regions.
The company was co-founded by Jet Lee, a former CEO of OPPO Indonesia, and
Tony Chen, leveraging their experience in the smartphone and e-commerce
industry to tap into the growing demand for reliable delivery services.
BUSINESS BACKGROUND
Core Services: J&T specializes in express delivery services, catering primarily to e-commerce
businesses, retail customers, and individual users. Their services include same-day delivery,
next-day delivery, cash on delivery, and international shipping.
Technology-Driven Operations: J&T Express has positioned itself as a tech-enabled logistics
company, offering real-time tracking, route optimization, automated sorting centers, and a
user-friendly mobile app.
Regional and Global Expansion: Initially focused on the Indonesian market, J&T rapidly
expanded to countries like Malaysia, Vietnam, Thailand, the Philippines, Cambodia,
Singapore, China, and more recently into the Middle East and Latin America. In 2021, it
entered the Chinese market and quickly became one of the top courier services there.
E-commerce Partnerships: J&T has formed strong alliances with major online marketplaces
such as Shopee, Lazada, and Tokopedia, becoming one of their preferred delivery partners.
REGULATORY
COMPLIANCE
SEC Regulations Affecting J&T Express
1.SEC Registration
J&T Express operates in the Philippines under the registered name PH Global Jet
Express Inc., doing business as J&T EXPRESS. The company holds SEC
Registration No. CS201820785, which was verified in official SEC records as of April
18, 2023.
2. Financial Reporting
As a registered corporation, J&T Express is obligated to submit annual financial
statements to the SEC. These audited financial statements are publicly accessible
through the SEC Express System, which allows users to request copies of corporate
documents online . The available financial statements cover the period from 2018 to
2022 .
SEC Regulations Affecting J&T Express
3. Corporate Governance
J&T Express adheres to corporate governance standards, with a board of directors
and senior management overseeing its operations. The company maintains
transparency by providing governance documents and investor relations information
on its official website .
4. Legal Compliance
In its terms and conditions, J&T Express stipulates that senders are responsible for
ensuring that their parcels comply with all applicable laws, rules, and regulations. The
company disclaims liability for any damages or legal issues arising from noncompliant shipments
DTI Regulations Affecting J&T Express
1. Accreditation and Registration Requirements
Under DTI Department Administrative Order No. 5, Series of 1995, domestic freight
forwarders like J&T Express must secure accreditation from the PSB. This process
involves submitting documents such as:
Articles of Incorporation or business name registration
Proof of paid-up capital (minimum ₱250,000)
Insurance coverage (minimum ₱100,000)
Specimen transport documents (e.g., waybills)
Inventory of transport equipment or contracts with trucking companies
Authority to inspect offices and warehouses
Accreditation is valid for two years and must be renewed before expiration to avoid
penalties or suspension.
DTI Regulations Affecting J&T Express
2. Consumer Protection in E-Commerce
Given J&T Express's involvement in e-commerce logistics, it must comply with consumer protection
regulations outlined in Joint Administrative Order No. 22-01. This order reiterates existing laws
applicable to online businesses and consumers, aiming to increase consumer confidence in ecommerce transactions.
3. Standardization of Freight Forwarding Services and Charges
The DTI, through the Philippine Shippers' Bureau (PSB), has established standardized services,
rates, and charges for containerized import shipments to protect shippers and importers from arbitrary
pricing. This standardization aims to enhance competition and encourage improved service quality
among freight forwarders. For instance, specific charges such as the Less Container Load (LCL)
charge, documentation fees, handling fees, and others have prescribed rates to ensure transparency
and fairness in the industry.
DTI Regulations Affecting J&T Express
4. Penalties for Unaccredited or Non-Compliant Entities
The DTI imposes penalties on freight forwarding entities operating without proper accreditation or those
with expired accreditation. However, to encourage compliance, the DTI has, at times, offered waivers and
reductions of certain penalties for unaccredited NVOCCs, international freight forwarders, and domestic
freight forwarders, as well as those with expired accreditation. These measures aim to provide
opportunities for entities to regularize their operations and adhere to industry standards.
DTI Department Administrative Order No. 5, Series of 1995: Governs accreditation and regulation
of domestic freight forwarders.
Consumer Act of the Philippines (RA 7394): Provides additional legal avenues for redress and
enforcement.
Department Administrative Order No. 11-02, Series of 2011: Allows waiver or reduction of
penalties under certain conditions (e.g., voluntary compliance or economic hardship).
BOC Regulations Affecting J&T Express
1. Expedited Clearance for Express Consignments
Under BOC Memorandum Order No. 46-98, express cargo operators (ECOs) such as J&T
Express are subject to specific procedures for the expedited clearance and release of express
consignments. This includes:
Categorizing shipments as documents (DOCS) or non-documents (NON-DOCS), with
further subcategories based on value.
Adhering to packaging standards, including weight and size limits.
Submitting accurate manifests and invoices for customs processing.
Utilizing the Express Consignments Clearance Office (ECCO) for processing and
clearance activities.
Complying with restrictions on prohibited items, such as hazardous materials, perishable
goods, and regulated imports
BOC Regulations Affecting J&T Express
2. Importer Accreditation
As per Customs Memorandum Order No. 23-2009, entities like J&T Express must obtain
accreditation to operate as importers. This process involves:
Submitting required documentation to the BOC.
Undergoing inspections to verify business legitimacy and operational capacity.
Ensuring compliance with customs laws and regulations
BOC Regulations Affecting J&T Express
3. Standardized Customs Fees and Charges
Effective June 10, 2024, the BOC implemented standardized service fees, dues, and charges
through Customs Administrative Order No. 02-2024. This applies to all stakeholders, including
air express operators like J&T Express, and covers services such as:
Vessel and aircraft supervision.
Processing and storage fees.
Overtime services for customs personnel.
BOC Regulations Affecting J&T Express
4. Anti-Drug Smuggling Initiatives
In collaboration with the Philippine Drug Enforcement Agency (PDEA), J&T Express has taken
measures to prevent the use of courier services for drug trafficking. This includes:
Implementing stricter safety protocols and employee training.
Encouraging customers to accurately declare package contents.
Conducting open package inspections to detect and deter illegal shipments
5. Parcel Processing Guidelines
The BOC requires that all imported goods, including those sent as gifts or donations, are
subject to duties and taxes if their value exceeds PHP 10,000. Proper documentation, such
as invoices and proof of payment, is necessary to ensure accurate valuation and tax
computation.
Bureau of Customs Shipment Tracking
Automated Customs Systems
TE2M (Electronic to Mobile) System: Automates customs processes and allows the
tracking of shipments from entry to clearance.
Cargo Targeting System (CTS): Used to assess risk and flag suspicious shipments.
VASP (Value-Added Service Providers): J&T and other couriers are required to
electronically transmit shipping documents and manifests via accredited VASPs for BOC
review.
Bureau of Customs Shipment Tracking
Shipment Documentation
Electronic Airway Bill (e-AWB)
Import Manifest (listing sender, recipient, content, value, and origin)
Invoice and packing list
These are reviewed and recorded in BOC systems, allowing officials to trace the shipment
throughout its journey.
Bureau of Customs Shipment Tracking
Parcel Scanning & Inspection
Goods entering the country are often subject to x-ray scanning and physical inspection
based on risk profiling.
The BOC monitors tracking numbers and labels, which must match submitted
documentation.
Any discrepancies (e.g. undeclared or misdeclared goods) trigger further investigation or
hold ordSurveillance & Seals
High-value or high-risk cargo may be assigned customs seals or GPS tracking devices.
For consolidated shipments, customs may require deconsolidation at designated
warehouses where goods are separated and tracked individually.
Bureau of Customs Shipment Tracking
Coordination with Courier Sytems
BOC coordinates with courier tracking systems like J&T’s to:
Monitor real-time package status
Cross-verify if delivery matches declared customs clearance status
Trace any misrouted or suspicious shipmentsAudit and Post-Clearance Verification
Even after delivery, BOC can:
Conduct post-clearance audits to verify the accuracy of declared information.
Require J&T to provide tracking history and delivery proof for randomly selected or
suspicious shipments.
BIR Regulations Affecting J&T Express
1. Tax Registration & Documentation
BIR Registration: J&T Express is registered with the BIR, ensuring compliance with tax
obligations.
Books of Account: The company maintains and registers its books of account, including
journals and ledgers, as required by the BIR.
Authority to Print (ATP): J&T Express has obtained the necessary ATP for issuing official
receipts and
BIR Regulations Affecting J&T Express
2. Tax Reporting & Filing
VAT Compliance: The company files Value-Added Tax (VAT) returns, adhering to BIR
regulations.
Withholding Tax: J&T Express complies with withholding tax requirements, ensuring timely
remittance to the BIR.
Tax Returns: Regular filing of income tax returns and other necessary documents is
conducted to maintain compliance.
LTO Regulations Affecting J&T Express
1. Vehicle Registration and Compliance
J&T Express's delivery vehicles must adhere to the following LTO requirements:
Registration: All vehicles must be registered with the LTO, ensuring they are roadworthy
and legally compliant.
Inspection: Vehicles undergo mandatory inspections to verify their roadworthiness.LTO
Portal
Fees: Associated fees include registration fees, Motor Vehicle User's Charge (MVUC), and
inspection fees
LTO Regulations Affecting J&T Express
2. Driver Licensing
Drivers operating delivery vehicles must possess valid licenses appropriate for the vehicle
types they operate.
3. Road Safety Compliance
Adherence to traffic laws and regulations is mandatory to ensure the safety of goods,
drivers, and the public.
INDUSTRY
SPECIFIC RISKS
INDUSTRY SPECIFIC RISKS
1.Intense Competition
The logistics industry is highly competitive with major
global players (e.g., DHL, FedEx, UPS) and strong regional
rivals (e.g., Ninja Van, Lalamove, SF Express).
Price wars and customer loyalty programs can squeeze
profit margins.
INDUSTRY SPECIFIC RISKS
2. E-Commerce Dependency
J&T is heavily reliant on the e-commerce sector. Any
slowdown in online shopping due to economic downturns,
regulations, or consumer behavior shifts directly impacts
parcel volume and revenue.
INDUSTRY SPECIFIC RISKS
3. Logistics Infrastructure Challenges
Delivery in remote or underdeveloped regions poses
difficulties due to poor road conditions, limited
warehousing, or lack of digital infrastructure.
Delays or damage due to logistical inefficiencies affect
customer satisfaction and brand image.
INDUSTRY SPECIFIC RISKS
4. Rising Operational Costs
Fuel price volatility, increasing labor costs, and the cost of
maintaining a fleet and warehouses can erode margins.
Seasonal surges (e.g., during sales or holidays) require
scalable but costly temporary resources.
INDUSTRY SPECIFIC RISKS
5. Technological Disruption
Rapid tech evolution demands continuous investment in
automation, tracking systems, and cybersecurity.
Falling behind technologically can result in poor user
experience or data breaches.
INDUSTRY SPECIFIC RISKS
6. Labor Management
High dependency on drivers, couriers, and warehouse
workers introduces risks of strikes, turnover, or low
service quality.
Pressure to meet delivery deadlines can lead to labor law
violations or safety concerns.
INDUSTRY SPECIFIC RISKS
7. Dependency on Third-Party Partners
J&T often collaborates with third-party logistics
providers (3PLs), subcontracted couriers, and fleet
operators.
Any failure in these partnerships—e.g., delays, lack of
coordination—can disrupt the overall service chain.
INDUSTRY SPECIFIC RISKS
8. Political and Geopolitical Risks
Operating across multiple countries exposes J&T to political
instability, trade restrictions, or diplomatic tensions, which
may hinder cross-border shipments or cause regulatory
challenges.
PFRS Standards &
Auditing Procedures
PFRS 15 – Revenue from Contracts with Customers
Application to J&T Express:
J&T earns income by providing delivery and courier services.
Under PFRS 15, J&T must:
Identify each contract with a customer (e.g., Shopee, individual senders).
Determine the performance obligation (delivery of a parcel).
Recognize revenue only when the service is completed (i.e., parcel is
delivered to the recipient).
PFRS 15 – Revenue from Contracts with Customers
Audit Procedures:
Understand revenue streams: Review contracts with customers (e.g.,
Shopee, individual clients) to identify performance obligations.
Test revenue recognition timing: Verify that revenue is recorded only when
delivery services are completed.
Analytical procedures: Compare revenue trends month to month or year over
year.
Cut-off testing: Check delivery logs around period-end to ensure revenue is
recorded in the correct period.
Substantive testing: Trace a sample of invoices to delivery confirmations and
accounting entries.
PFRS 16 – Leases
Application to J&T Express:
J&T uses leased warehouses, offices, and delivery vehicles.
Under PFRS 16, instead of recording rent expense, J&T must:
Recognize a right-of-use asset (i.e., the right to use the leased space or
vehicle).
Recognize a lease liability for lease payments due over time.
Depreciate the asset and record interest on the liability.
PFRS 16 – Leases
Audit Procedures:
Obtain the lease register and review key lease agreements (e.g.,
warehouses, trucks).
Assess if leases meet recognition criteria under PFRS 16.
Recalculate lease liabilities using correct discount rates and lease terms.
Review the depreciation of right-of-use assets.
Inspect lease disclosures in the financial statements for completeness and
accuracy.
PAS 2 – Inventories
Application to J&T Express:
J&T holds consumable items like packaging materials.
These are recorded as inventories until used, then expensed.
Inventories are measured at cost or net realizable value, whichever is lower.
PAS 2 – Inventories
Audit Procedures:
Attend physical inventory count and perform test counts.
Compare final inventory report with GL balances.
Trace purchase of packaging materials to supplier invoices and receiving
reports.
Test pricing of inventory items using recent purchase invoices.
Review aged inventory reports to identify slow-moving or obsolete items.
Verify write-downs of obsolete or damaged supplies and trace to accounting
records.
PAS 12 – Income Taxes
Application to J&T Express:
J&T must comply with corporate income tax laws.
It calculates current tax expense based on taxable income.
It also recognizes deferred tax for timing differences between financial and
tax reporting (e.g., depreciation methods, lease expenses).
PAS 12 – Income Taxes
Audit Procedures:
Recalculate current income tax based on audited net income and applicable
tax rates.
Review deferred tax computations and reconcile temporary differences.
Examine prior year tax returns and tax payments.
Review supporting schedules for deferred tax assets and liabilities.
Evaluate management’s assessment of recoverability of deferred tax assets.
PAS 16 – Property, Plant, and Equipment (PPE)
Application to J&T Express:
J&T owns buildings, trucks, computers, and sorting equipment.
These assets must be:
Capitalized (recorded as assets, not expenses).
Depreciated over their useful life.
Tested for impairment if there is damage or loss in value.
PAS 16 – Property, Plant, and Equipment (PPE)
Audit Procedures:
Inspect a sample of additions and trace to supplier invoices and asset
registration.
Conduct physical inspection of a sample of fixed assets.
Recalculate depreciation for a sample of assets and verify useful lives.
Review impairment assessments for idle or damaged assets.
Examine disposals and verify appropriate accounting treatment.
PAS 37 – Provisions, Contingent Liabilities, and
Contingent Assets
Application to J&T Express:
J&T might face:
Legal claims from damaged or lost parcels.
Fines from regulators.
If an obligation is likely and can be estimated, it records a provision.
If it's only possible (not probable), it discloses it as a contingent liability.
PAS 37 – Provisions, Contingent Liabilities, and
Contingent Assets
Audit Procedures:
Inquire with management and legal counsel regarding ongoing or potential
claims.
Review correspondence, legal letters, and case files.
Evaluate whether recognition criteria are met (probable and measurable).
Assess estimates for accuracy and completeness.
Verify that contingent liabilities are disclosed where necessary.
Emerging
Technologies
EMERGING TECHNOLOGIES
AI & Machine-Learning
optimisation
RFID-enabled
track-and-trace
Deploying the DeepSeek AI model in
Thailand and other markets to predict
traffic, reroute vehicles, and speed up
automated sorting lines.
20 million reusable mailbags now
carry RFID chips that record each
hand-off and location scan in real
time.
EMERGING TECHNOLOGIES
Big-data
analytics
platform (JMS)
Cloud-native
digital logistics
network
Automation &
robotics in hubs
Internal “JMS” system
and centralized data
lake consolidate parcel,
finance, and customerexperience data for
predictive modelling.
Ongoing investment in
intelligent infrastructure
and digitalisation across
13 markets, with parcel
volume hitting 24.7
billion in 2024.
High-speed robotic
sorters, vision systems,
and RPA bots handle
repetitive reconciliation
tasks.
RELEVANCE TO AUDITING
AT J&T EXPRESS
01
Sharper risk assessment
02
03
04
05
06
Completeness & accuracy of revenue recognition
Continuous auditing & real-time dashboards
Control testing in an automated environment
Fraud & cyber-resilience
Auditor upskilling & talent management
RELEVANCE TO AUDITING
AT J&T EXPRESS
Sharper risk
assessment
AI-generated routing, sorting, and
demand forecasts create dense,
time-stamped data that reveal
outliers (e.g., unusual detours,
repeated failed-delivery loops) the
moment they occur. Auditors can
ingest this feed to flag operational or
fraud risks far earlier than quarterly
reviews.
Completeness &
accuracy of revenue
recognition
With 24.65 billion parcels in 2024,
even a 0.01 % mis-capture equals
millions
of
records.
Crossreconciling RFID event logs with
billing tables helps ensure every
parcel that triggers revenue has an
associated scan trail and vice-versa
closing traditional “ghost parcel”
gaps.
RELEVANCE TO AUDITING
AT J&T EXPRESS
Continuous auditing
& real-time
dashboards
Cloud analytics let auditors build live
KPI boards (delivery-time SLA
breaches, hub-level error rates,
carbon-emission metrics from the
ESG data mart) and set threshold
alerts, moving the function from
retrospective
to
continuous
assurance.
Control testing in an
automated
environment
Robotic sorters and RPA scripts
shift control reliance from people to
code. Auditors must therefore
review
algorithm
versioning,
change-management logs, and
segregation-of-duties
in
bot
credentials areas where IT-audit
techniques and AI-explainability
tools become essential.
RELEVANCE TO AUDITING
AT J&T EXPRESS
Fraud &
cyber-resilience
AI-driven intrusion and anomalydetection systems (used to protect
e-wallet and customer data) emit
detailed alert logs that can be
sampled
or
stratified
for
effectiveness testing, supporting the
audit opinion on cybersecurity
controls.
Auditor upskilling &
talent management
J&T’s own leadership stresses the
need for logistics professionals to
master data-science tools. Audit
teams are likewise expected to
learn Python/Spark for largevolume
testing,
visualization
platforms for board reporting, and
AI-explainability
techniques—
aligning with the profession’s shift
toward data-driven assurance.
J&T EXPRESS SUSTAINABILITY
AND PROMOTION OF
ENVIRONMENTAL, SOCIAL,
AND GOVERNANCE
PRINCIPLES
J&T Express has prioritized green and low-carbon initiatives throughout
its supply chain. The company has introduced 150 liquefied natural gas
(LNG) vehicles and deployed 63 intelligent driving vehicles to optimize
fuel consumption and reduce emissions. Additionally, J&T Express has
adopted reusable transit bags and recyclable packaging materials,
significantly reducing its environmental footprint.
Green
and
Low-Carbon
Logistics
J&T Express actively promotes green and low-carbon
development throughout its operations, from pick-up to
recycling. Initiatives include using one-sheet e-waybills,
recyclable courier boxes, reusable transit bags, and packaging
recycling devices. By December 2023, J&T Express had used
approximately 25.6 million reusable transit bags over 1.1 billion
times. Moreover, the company established a four-in-one green
transportation model, integrating fuel management, route
optimization, energy utilization, and driver training. In 2023, J&T
Express introduced 150 liquefied natural gas vehicles and
deployed 63 intelligent driving vehicles on line-haul routes.
Sustainable Packaging and Waste Reduction
To reduce excessive packaging and waste, J&T Express
promotes the use of narrower sealing tapes and has designed
the "RED BOX" recycling box. Additionally, the company has
placed more than 17 million recyclable transfer bags,
effectively improving sorting center efficiency while reducing
waste and pollution. Each use of a recyclable transfer bag can
reduce carbon emissions by approximately 169 grams
compared to disposable woven bags.
Community Support through 'J&T Cares'
J&T Express Philippines has extended support to communities
affected by natural disasters such as Typhoon Egay, the Mayon
Volcano eruption, and earthquakes in Surigao del Sur. Through
these initiatives, the company has provided critical assistance
to thousands of families, emphasizing its commitment to
making a positive impact on society.
Educational
Support
through
Brigada
Eskwela
In line with its commitment to giving
back to the community, J&T Express
participated in the Department of
Education's Brigada Eskwela 2023
campaign. The company tied up with
schools and local government units
nationwide to extend support to
students in preparation for the
reopening of classes. Activities included
cleaning and repainting school facilities
and donating learning materials to
students.
ESG Governance Structure
J&T Express has established a robust ESG governance
structure, ensuring compliance with industry standards and
promoting ethical business practices. Training programs on
business ethics and integrity have been conducted for
thousands of employees, reinforcing the company’s
commitment to responsible operations.
Delivering Sustainability, One Seedling at a Time!