Audit Checklist for Inventory Management
1. Software Check
2. Stock Valuation Process (Cost of Inventory & Method of Valuation)
3. Frequency of matching Recorded stock with Physical stock
4. Stock related MIS format
5. Security of Stock (CCTV, Fire Extinguishers, etc)
6. Insurance of Stock
7. Stock Categorization (Huge, Medium & Low)
8. 3rd Party Inventories (Job work/3rd party godowns)
9. Old Inventory, Expired Inventory, Inventory nearing Expiry dates or Perishable Inventory
10. Inventory Age Analysis
11. Checking Duplicate Codes
Objectives of Inventory Audit
1. Reduce wastage
2. Reduce Risks associated with Stock
3. Achieve financial audit objectives
4. Cost Control
5. Helping in decision regarding stock order, purchases
6. Evaluate the existing internal controls on stock
7. Control Sales returns
8. Reduce holding costs of inventory