As part of our support to retail companies, we participate in and supervise physical inventory counts, verifying that counting is carried out in accordance with established procedures and that any differences found are properly documented.
Why is it necessary?
Because inventory is the main business risk for retail companies: it concentrates a large share of the investment and is where shrinkage, recording errors and unexplained differences accumulate. Independent supervision helps maintain control over that asset.
We are backed by more than 25 years providing audit services across industries such as tourism, retail, government and services. We have supported inventory control for several groups in the southeast region.
Scope
Supervision of and participation in physical inventory counts.
Verification of compliance with established counting procedures.
Report of differences found and observations on stock control.
Because in a retail business it is the largest and most exposed asset: shrinkage, expirations, data entry errors and shortages accumulate unnoticed until the count. Poorly controlled inventory distorts cost of sales and, with it, the results for the year.
Who should supervise inventory counts?
Responsibility for the count lies with the company, but supervision should be carried out by someone independent from whoever has custody of the merchandise. That separation is what gives the result its value.
How often should inventory counts be performed?
At least one physical count per year, generally close to year end. In high-turnover operations it is advisable to complement it with cycle counts during the year on the product families with the highest value or rotation.
