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An Auditor’s Perspective: Basics of Inventory Controls

For many organizations, inventory is one of the largest assets carried on a company’s books, and as a result, it is important to maintain appropriate controls over these assets. Inventory controls help your organization to maintain accurate records and to fulfill promises to customers. Risks specific to a lack of inventory controls includes the potential for lost, stolen, misappropriated, or miscounted items during routine physical counts. Below are some quick tips on maintaining appropriate oversight and prevention of unexpected inventory shrinkage:

• Physical controls: Keep your inventories in a secure location.