Audit and Accounting > Inventory and Stock
Inventory and stock can vary in volume and cost across organizations.
The following are commonly used tests (grouped by type).
- Reconcile physical counts to computed amounts
- Analyse usage and ordering to improve turnover
- Analyse high value transactions
- Summarise and stratify turnover by stock item
- Summarise stock on-hand by group, location, type, etc.
- Create custom reports on stock and high value balances
- Review product reordering volumes by item, warehouse, and vendor
- Summarise products by group, location, type, etc.
- Summarise and stratify turnover by stock item in any order
- Age inventory (e.g., by date of receipt)
- Report on products in order of profitability
- Statistically analyse usage and ordering to improve turnover
- Test clerical accuracy of totals and extensions
- Check product reordering volume by item, warehouse, and vendor
- Determine the percentage change in sales, price and/or cost levels by product/vendor
- Assess the financial viability of LIFO versus FIFO management
- Identify surplus obsolete/damaged inventory by sorted turnover analysis
- Identify differences between standard costs and actual costs
- Identify stock acquired from group companies
- Segregate variances from standard pricing in amount order
- Isolate stock lines/products with cost greater than retail price, with zero/negative quantities, or with zero/negative prices
- Isolate items where stock exceeds maximum stock levels
- Select items from perpetual stock for test reconciliation
Gaps and Duplicates
- Test for duplicate parts, item numbers, prices or descriptions
Matching and Comparing
- Compare yearly volume with on-hand quantity for stock items
- Compare cost to retail price to look for pricing discrepancies
- Compare the value of physical counts to general ledger value
Monetary Unit or Random samples for physical verification or checking additions