What stock verification tests
Inventory is often one of the largest assets of a trading or manufacturing subsidiary, and it is also one of the easiest to overstate. Our tests focus on three things.
- Existence: items selected from the system listing are found on site in the recorded quantity
- Completeness: items found on site are present in the system, at the right location
- Condition: stock is usable and saleable, not damaged, expired, obsolete or held for others
- Consistency: units, codes, batches and cost data are recorded the same way across documents and system
How we select and test samples
We take the closing stock listing from your 1C, ERP or WMS and pick a sample weighted towards high-value, slow-moving and high-risk items, plus a random element. Testing runs in both directions, from the listing to the shelf and from the shelf to the listing, because each direction finds different problems.
On site we count the selected items with barcode scanners where labels allow, photograph the condition of anything doubtful and note stock in quarantine, in transit or belonging to customers. Where the sample shows a pattern, for example a whole product group with no movement for a long period, we flag it and widen the test if you agree.
Valuation support, not an audit opinion
We do not set accounting values or issue an audit opinion. What we provide is the factual base for valuation: lists of slow-moving, damaged or expired items, evidence of condition, and cases where cost data looks inconsistent between similar items. Your finance team and auditors then decide on any provisions or adjustments.
Accounting and tax treatment of write-downs depends on local rules and your group policy, so please confirm it with your local accountant or auditor. Our role is to make sure the facts behind their decision are complete and well documented.
When a stock existence check is most useful
Head offices often ask for this check when the inventory balance of a subsidiary has grown faster than its sales, when the last count was a long time ago, or when the external auditors have raised questions about stock in a previous year. It is also useful before a change of warehouse manager, so the handover starts from verified figures, and before a refinancing, where a lender may want comfort over stock used as security.
The check works best when your team prepares a clean stock listing, keeps locations labelled and tells us in advance about stock held off site, in transit or at customers. Anything that cannot be seen during the visit is listed separately in the report, together with the documents we reviewed instead, so the reader knows exactly what was physically verified and what was not.
What you receive
- D1Sample selection method and full list of items tested
- D2Results by item: found, missing, surplus, wrong location
- D3Condition notes with photos for doubtful stock
- D4List of slow-moving, damaged and expired items for review
- D5Summary report in English, in Excel and PDF
Common questions
Q1Is this the same as the auditor attending the stock count?
No. It is an independent check commissioned by you. It can support your auditors, but they decide how to use it, so agree the scope with them early.
Q2Do you value the stock?
No. We provide evidence on existence, condition and consistency. Valuation decisions remain with your finance team and auditors.
Q3Can the check be done at the period end?
Yes, and it can also be done shortly before or after, with a roll-forward or roll-back of movements tested against documents.