This inventory audit document includes three sample work programs for reviewing audit procedures for inventory at a company. The work steps focus on receiving, production process/physical security, physical counts, inventory valuation, inventory reserves, consignment inventory, scrap, and shipping and receiving (including returns).
Inventory audit work steps include: document any potential control weaknesses or unusual practices and investigate upon arrival; ensure that the financial statement trial balance agrees with the trial balance maintained by the facility; obtain explanations for any differences with the plant controller upon arrival; reconcile the perpetual inventory listing with the account balances that appear on the G/L; and obtain and document explanations for differences from the controller upon arrival.