How Do I Perform an Inventory Audit?

Inventory material audit refers to the audit of the physical and amount of various materials in the company's inventory, including various raw materials and main materials, auxiliary materials, purchased semi-finished products, repair spare parts, fuel, packaging, etc. Inventory materials are the main component of an enterprise's inventory, occupying a large amount of corporate liquidity. A good audit of inventory materials will have a positive effect on improving corporate management, saving corporate liquidity, reducing corporate product costs, and improving corporate economic returns. .

Inventory material audit

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Inventory material audit refers to the audit of the physical and amount of various materials in the company's inventory, including various raw materials and main materials, auxiliary materials, purchased semi-finished products, repair spare parts, fuel, packaging, etc. Inventory materials are the main component of an enterprise's inventory, occupying a large amount of corporate liquidity. A good audit of inventory materials will have a positive effect on improving corporate management, saving corporate liquidity, reducing corporate product costs, and improving corporate economic returns. .

The audit of inventory materials should be carried out from a combination of physical quantity and monetary amount. The main points of review are:

1. Study and evaluate the material's internal control system, and find out whether the company has a clear division of responsibilities in materials procurement, transportation, acceptance, storage, distribution, payment, and accounting, etc., and whether there is a practicable internal control system.

2. To check whether the inventory materials are consistent with the actual accounts, the auditors should review the book records of the general ledger and detailed ledger of the inventory materials to find out whether the balance of the general ledger and the detailed ledger are consistent, and at the same time, the actual quantities of various materials on the material ledger are settled Based on the review of the inventory material account, further detailed or spot checks are used to count the physical quantity of the inventory material, and the inventory result is checked with the book to find out whether the inventory material is consistent with the account; if there is any discrepancy, it should be further Find out the reasons for the losses and gains, and propose solutions.

3 Examine the receiving and sending business of inventory materials, and find out the legality, authenticity, and correctness of changes in inventory materials. Auditors should check the detailed account of the materials, and review the receiving and sending business of inventory materials one by one. For the income business of inventory materials, the implementation of the material supply plan, the implementation of material procurement contracts, the acceptance of purchased materials, and the cost of material procurement should be reviewed. For the issue of inventory materials, the acquisition of Whether the procedures are complete, whether the prescribed approval procedures have been passed, whether the receiving materials are really needed for production, whether the measurement tools used by the supply department are accurate, and the rationality and legality of non-production receiving materials are examined.

4 To review the correctness and reliability of the balance of inventory materials as shown on the balance sheet,

(1) Defects and disadvantages in the internal control system, such as incomplete procedures for sending materials, unclear responsible persons, and irregular inventory of stock materials;

(2) The materials received by the production department are consumed by the lead. The remaining materials at the end of the month do not go through the procedures of return or false return, increase the cost of the product, or use this to falsify for personal gain;

(3) falsely obtaining materials in the name of production for use in non-productive projects such as infrastructure or other welfare;

(4) blind purchase regardless of production needs, resulting in material overstocking and waste;

(5) Fraudulent practices, arbitrage of state-stricken materials, use of price differences, resale and resale, and illegal gains;

(6) collusion with external units, taking advantage of the opportunity to commission processing materials, by giving more raw materials, reducing the processing rate and raising processing fees, etc., the parties receive bribes from it;

(7) Material resale income is not recorded, concealed, transferred, etc., forming a "small treasury";

(8) The carry-over of material costs is unreasonable and non-compliant, such as the material cost used for overhaul projects or the material cost that should be expended by special funds is transferred to the cost of basic production; the method of material cost carry-over The inconsistency between the previous and the later, and unauthorized changes without the approval of relevant departments, resulting in unreasonable carry-over of material costs;

(9) The inventory materials do not match the accounts and the accounts do not match.

Inventory goods audit

1 Wang Junsheng. A practical manual of new standard accounting. Ocean Press, 1993

2 Dong Dasheng, Chen Qing, Yang Hui, Ma Xiaofang. How to Deal with Audit DepartmentsA Practical Auditing Knowledge Q & A. Law Press, 1993 ^[1]