INVENTORY COUNT FORM
Attendance at an inventory count is often the best way of providing evidence of the proper functioning of the clients
inventory count procedures, and hence of the existence of inventories and their condition. Evidence of the condition
of inventory can assist us when considering valuation
Location of count Bulacan Agroindustrial Subdivision, Pio
Cruzcosa, Calumpit, Bulacan
Date of count December 10-18, 2015
Issues arising
Towards the end of the inventory count assess whether:
(a) Whether the instructions and arrangements for inventory count were adequate.
(b) Whether instructions were properly carried out.
(c) Whether the descriptions and quantities of the companys inventories were
completely and accurately recorded.
(d) Whether the arrangements for reviewing the condition of inventories and for
identifying slow-moving inventory were satisfactory.
Consider also
the control environment and security procedures
the condition of inventory
the condition and use of the plant and machinery
the condition and use of the building
the working environment
If there are comments in respect of the above summarise them below and document
appropriate action- for example designing additional audit procedures, communication to
Management and Those Charged with Governance (record on C1), or recording as a
significant issue (record on B4)
Summary of point Resolution or cross reference
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 1 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
PRELIMINARY
1. Ensure adequate briefing on the On December 9, 2015, a briefing was
client's business and types of conducted by Mr. Antonio Yee, Plant Manager,
inventories , points to watch out for, together with Mr. Nomer Gatmaitan,
risks of obsolescence etc Accounting Head, to discuss the procedures
and other matters that are important for the
scheduled inventory count.
2. Consider points arising from last
year's inventory count or counts at
other locations
3. Are there any significant changes in None
arrangements from last year? (If so,
discuss with client's management).
4. Have written inventory count A written inventory count instruction was
instructions been issued by the issued by the company.
client? If so, attach a copy to these
notes.
5. Do inventory count instructions deal The auditors believe that the organization,
adequately with the organisation, count and control in inventory instructions are
count and control of inventory count? adequate.
If not record suggestions for
improvements on the form C1.
6. Is any expert help required to assist Yes. The Quality Control Officer.
us with attendance at the inventory
count?
7. Should test counts be performed if
so, note here any specific
requirements / guidance for inventory
count attendees.
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 2 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
ORGANISATION
8. Who is in charge of inventory count? The following departments are responsible for
the inventory count:
Material Management Department
Accounting Department
Production Department
Engineering Department
Quality Control
9. Are inventories organised in such a Unlike in the Main Warehouse where materials
way as to facilitate complete and inventories are properly arranged in racks,
accurate counting? materials inventories in Warehouse Annex
lack order. There were coils of different
classes that were put together and hence
created confusion in the counting of materials
inventories.
On the other hand, finished goods inventories
are arranged accordingly. Although finished
goods inventories can be seen in many
locations within the Warehouse Annex, one
can observe that finish goods inventories of
previous years were separated from the FG
produced in the current year. Finish goods for
stocking were physically segregated from the
FG with J.O. numbers.
10. What arrangements operate to ensure During the period of inventory count, slitted
that all items are counted and that no coils in one location were tagged to ensure
item is counted twice? that all material inventories were counted and
no single coil is double counted. After tagging,
coils were transferred to another location to
properly arrange the materials inventories.
Finish goods inventories were simply tagged
since they are already arranged accordingly.
11. If quantities rely on accurate According to the Quality Control Officer, they
measurement, when were weighing do the calibration of weighing machines
machines, counting devices and annually. However, he is not sure of the exact
measuring gauges last checked date when they last calibrated the weighing
before inventory counting? machines.
12. If determination of quantities relies on
knowing the volume or unladen
weight of storage containers how is
this determined and were
volumes/weights checked before
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 3 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
counting?
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 4 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
13. Is there any inventory situated at None.
remote warehouses or depots that
should be included in the inventory
sheets? If so, did you visit the
location?
14. If inventory under the custody and None.
control of a third party is material
perform one or both of the following:
Request confirmation from the third
party as to the quantities and
condition of the inventory held on
behalf of the entity
Perform inspection or other audit
procedures appropriate in the
circumstance (particularly where there
is doubt regarding the integrity and
objectivity of the third party)
15. Is there any inventory on the There are mother coils and slitted coils owned
premises which is not the property of by PMPI that are kept in the warehouse. These
the company, e.g. goods held on inventories are held by SFPI for production.
consignment or customers' own These coils were tagged specifying that these
goods awaiting processing? If so: are the property of PMPI.
(a) What is the reason for the
inventory being held?
(b) Have adequate instructions been
given to ensure that these items are
physically segregated and separately
listed?
16. Is there any inventory on the None
premises which is subject to
reservation of title? If so, have these
items been separately identified?
17. Is there any other inventory on the Yes. According to the security guards, there
premises that appears not to have were scrap inventories waiting for disposal
been included in the count? and for auction.
18. What arrangements operate to The QCO identifies damaged inventories and
identify items of inventory which are reclassifies the same subject to management
slow moving, redundant or damaged: approval. However, according to the new
(a) Who decides and are they Plant Manager, Antonio Yee, the approval of
competent to make the decisions? reclassification is only academic as the QCO
(b) How are these inventories ultimately has the technical know-how to
identified? identify downgraded inventories.
(c) Are they listed separately?
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 5 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
19. What arrangements operate to N/A
ascertain the quantities of inventories
which are exceptionally difficult to
identify or measure or are liable to be
affected by storage conditions?
20. Have instructions been given to The management did not order a freeze of
'freeze' the movement of all operation during the inventory count.
inventories during inventory
counting? If not, give details of
control of inventory movements.
21. What arrangements operate where all Serially numbered tags were used to control
inventories cannot be counted at the the counting of inventories.
same time?
PROCEDURES
22. As regards the control of inventory Inventory tags were serially numbers.
cards and sheets: Signatures were obtained for the issue of all
a) Are inventory cards and sheets cards/ inventory tags.
serially numbered?
b) If not, how are they controlled?
c) Are signatures obtained for the
issue of all cards and sheets?
d) Is a check made after inventory
count to ensure that all cards and
sheets issued, whether used or
not, are returned to the controller?
23. Are inventory cards and sheets signed Yes
by the counter and listed?
24. Is the inventory counted by or in the Yes
presence of some person who is
independent of the person normally
responsible for the inventory?
25. Is the inventory counted or weighed
by one person and listed by another?
26. Are the counts checked or tested? If Yes. The counts were checked by a warehouse
so, by whom and approximately what personnel and an accounting personnel.
proportion of the total is covered?
27. Are the counters and listers properly Yes. Queries were raised to the accounting
supervised? head whenever there are items that cannot
be found. Inventory count teams regularly
meet to discuss the progress and the
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 6 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
problems encountered during the count.
28. Have you considered all aspects Yes
affecting existence, ownership and
value of inventories as recorded,
paying particular attention to:
(a) Items which could be overlooked
(e.g. in
passage ways, overflow areas,
vans
awaiting shipment etc)?
(b) The extent to which subsidiary
notes and
lists were used as the basis for
preparing
the inventory sheets?
(c) Entries on the inventory sheets
which may give rise to
doubt or misunderstanding
(e.g. bad figures, inadequate
description,
misleading units of quantity
etc.)?
CUT-OFF
29. What arrangements are made to The company performed a cut-off.
account correctly for goods received
and despatched/shipped immediately
before and after the inventory count?
30. Are such goods physically segregated Goods are capable of identification through
and capable of identification? inventory tags with job orders and customers
name. However, these goods are not
physically segregated.
31. What arrangements are made about
goods in transit to ensure they are
properly accounted for?
OTHER NOTES
Record details of: Inventory Count Sheet details:
Tag No.
(a) Description, quantity and inventory Coil No.
sheet reference of all items counted Date
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 7 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
or which were subject to approximate Location
checks; this check should be done Specification
both from the inventory sheets and Supplier
from the inventories. Quantity
Type Counted By
(b) Cut-off. Record the last goods Audited By
received and goods
Checked By
despatched/shipped note numbers
These are inventory Count Sheet:
used in the accounting period,
Original Copy for Accounting
ensuring that all series are included.
Department
(c) Inventory movements during the Duplicate Copy for the store
count eg deliveries and Triplicate Copy for Materials
despatches/shipments so that it can Department
be checked later that such items were
included or excluded from
inventory/receivables/payables as
appropriate.
(d) Inventory cards and sheets? Ideally
obtain copies of all inventory sheets
used. If this is not possible record the
sequence numbers of both used and
unused inventory cards/sheets so that
this can be compared later with
inventory sheets used for valuation
purposes.
(e) If it is not possible to obtain copies of
all inventory sheets take copies of a
sample or alternatively note details of
a few items from a sample of
inventory sheets so that these can be
later used to validate the inventory
sheets used for valuation purposes.
(f) Obsolete/damaged goods
(g) Any other matters to be followed up
during the audit (with sufficient detail
to enable the inventory items or
records to be identified later).
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 8 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
CLIENT: Steelframe Philippines, Inc. File
PERIOD ENDED: ref. N3.
December 31, 2015
1
Sign Date
Prepare FACV/JRG 12/15/2015
d
Page 9 of 9 Reviewe RSR
d
Reviewe GJM
d
INVENTORY COUNT FORM
