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Particular

1. Summarize below on detail on the location, production capacity and


valuation methods:
Location Date of Client Personnel in % of Total Inventory
Count Charge

Production Capacity of units:


Particulars 2018 2017
Licensed Capacity
Installed Capacity
Actual Capacity
Valuation Method of Stocks:
Particulars 2018 2017
Raw Material
Work in Progress
Finished Goods

2. Do adequate detailed written inventory instructions and procedures exist? If


yes, attach a copy.

3. Do inventory procedures give appropriate consideration to the location and


arrangement of inventories? Describe.
4. Do inventory procedures give appropriate consideration to identification
and description of inventories? Describe.
5. Is the method of determining inventory quantities specified (e.g., weight,
count)? Describe.
6. Is the method used for recording items counted (e.g., count sheets, pre-
numbered tags) adequate? Describe.

7. Are inventory tags used?


a. Are they pre-numbered?
b. Is accounting for inventory tags adequate and does it include control with
respect to tags used, unused, and voided? Describe.

8. Are adequate procedures in place to identify inventory counted, ensure that


all items have been counted, and prevent double counting? Describe.

9. Are obsolete, slow-moving, or damaged inventories properly identified and


segregated? Describe.
10. Is the inventory reasonably identifiable for proper classification in the
accounting records (e.g., description, stage of completion)? Describe.
11. Are inventory counts subject to:
a. Complete recounts by persons independent of the ones involved in the initial
counts?

b. Recounts only of merchandise having substantial value?


c. Spot checks by supervisory personnel?
12. Are counts performed by employees whose functions are independent of
the physical custody of inventories and recordkeeping functions? Describe.

13. Do proper accounting controls and procedures exist for the exclusion from
inventory of merchandise on hand, which is not property of the client (e.g.,
customers’ merchandise, consignments in)? Describe.

14. Do proper accounting controls and procedures exist for the inclusion in
inventory of merchandise not on hand, but the property of the client (e.g.,
merchandise in warehouses, out on repair, consignments out)? Describe.

15. Will identical inventory items in various areas be accumulated to allow a


Describe.tie in total counts to a summary listing subsequent to the observation?

16. Is the movement of inventory adequately controlled (e.g., shipping and


receiving activities suspended) during the physical count to ensure a proper
cutoff?

17. Are significant differences between physical counts and detailed inventory
records investigated before the accounting and inventory records are adjusted
to match the physical counts? Describe.

18. Will the client be using the services of a specialist? If yes, describe the
arrangements that have been made.

19. Will inventory at remote locations be counted? Describe.


20. Will special counting procedures or volume conversions be necessary (e.g.,
items weighed on scale)? Describe.
21. How will work-in-process inventory be identified? Describe.
22. How will the stage of completion of work-in-process inventory be
identified? Describe.
23. Describe any other matters that should be noted for the inventory count.
Comment
Particulars
Client:
Year End:
Title:
Date of Preparation:
Initials of Preparer:
Initials of Reviewer:
Planning:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Stock Taking:

1.

2.
3.
4.
5.
6.

7.

8.

9.
10.

11.
12.

Summary of Records:

1.
2.
3.
4.
Particulars
Client:
Year End:
Title:
Date of Preparation:
Initials of Preparer:
Initials of Reviewer:
Planning:

Obtain Summary of different types of finished inventory lines with approx. value indicated
Obtain Summary of different types of raw inventory lines with approx. value indicated
Obtain Summary of different stages of WIP with approx. value indicated
Obtain planning and method for counting small components from client
Obtain list of personnel involved on behalf of client for stock taking
Obtain copy of client's inventory count instructions and assess if any changes are needed.
Obtain plan/ list of warehouse and inventory holding location.
Obtain list of inventory held by third party and their location.
Obtain list of inventory held on behalf of third party/customers.
Obtain list of inventory already sold but not moved and consignment goods.
Obtain detailed list of slow moving and old items.
Plan on how many test counts you will perform and how you will select the items.
Stock Taking:

Note whether personnel responsible for counting and personnel responsible inventory management
are different
Note how many counter teams are there- for double check on test basis there could be two teams
Note whole area is restricted for movement during count
Note how the counted goods are marked
Note how the client records the goods that (if) are moving on the day of count.
Check how the raw materials or finished goods are counted and recorded with codes, descriptions and
numbers:
a) from physical inventory to clients count sheet- confirms accuracy and correctness
b) from count sheet to physical inventory- confirms existence
Check whether any materials are in transit or not and if it is possible to count:
a) check last lc opened
b) checked last purchase order arisen
c) match last grn with lc, bill of entry, purchase order to confirm if there is material in transit
Check if the inventories are actually moved in FIFO basis (check warehouse management whether
goods came first are actually issues first)
Check whether old, obsolete, damaged goods are counted, and recorded with codes, description and
numbers.
Check how WIP count is assessed:
a) Volume of part complete parts at each stage
b) Assess how many finished goods will be produced from last stage of WIP and check the actual
production to assess accuracy
c) Obtain the last ticket (cutting, sewing etc.) sent from one department to each till the finished goods
are ready.
d) Obtain how many pieces were cut, sewed, finished and packed during the last month.
e) Obtain the length of production cycle from production manager or so.
f) Obtain % of completion for the last orders which are less than 100%.
Obtain Approx unit cost of items, both raw and finished goods.
Obtain last 5 (five) copies of from site:
a) dispatch notes
b) goods received notes
c) material requisitions
d) receipts to finished goods
e) credit notes raised by the client to customers
Summary of Records:

Record details of any problems encountered


Record any differences arises and assess value of such difference from person responsible
Record cause of difference and representation of management.
Subsequently check whether differences are adjusted in the accounts.
Ref Comment
Stock Count Report Location: Stock Count Accuracy:

Present on
Present on behalf of
Date: behalf of
Client:
Firm:
SL No.
Qty as
Qty as per Physical
Code/Bin per Explanation for
Category Item Inventory Qty Discrepancy
card No. Stock discrepancy
Report Counted
Card
Explanation for
discrepancy