Preparing inventory for auditor observation

Year-end inventory observation fails more often on logistics than on accounting theory. Auditors need clear aisle access, frozen movement during the count window, and sheets that match the bin locations on the floor.

Freeze the floor

Agree a count window with operations. Incoming receipts and outgoing shipments during that window create cut-off exceptions that take days to unwind. If a plant must keep shipping, segregate a “live” bay and document every movement with timestamps.

Match tags to the ledger

Print count sheets from the same system that feeds the general ledger. Handwritten adjustments should be initialled by both the counter and a supervisor before auditors leave the site.

Slow-moving stock

Pull a report of items with no movement in twelve months. Auditors will sample these heavily. Having condition notes ready — damaged, obsolete, consigned — shortens the day.

After the count

Reconcile count totals to the perpetual records within forty-eight hours. Late reconciliations are one of the most common reasons draft opinions slip past banking deadlines in Taiwan’s March rush.