Inventory Audit Services

Types of inventory audits we support

Annual physical inventory audit

Year-end or fiscal-year-end full inventory count with formal documentation suitable for external auditor reliance. Required by most retailers above a certain revenue threshold for financial reporting purposes. We support planning, count execution coordination, result documentation, variance reconciliation, and the formal audit report.

External auditor preparation

Most external auditors test inventory by attending a portion of the physical count, sampling key SKUs, and reviewing the reconciliation process. We prepare the inventory data, count plan, and supporting documentation so the auditor visit goes cleanly — and so the audit findings are predictable rather than surprises.

Internal audit support

Internal audit teams need periodic inventory data quality reviews independent of the operations team. We provide that independent function — sample-based testing, reconciliation review, control evaluation, and reporting to the audit committee.

Statutory inventory audits

For retailers with specific statutory requirements (regulated industries, public companies, state-licensed operations) we support statutory inventory audits with the required documentation depth.

Special-purpose audits

Pre-acquisition diligence inventory audits, lender-mandated inventory audits, inventory insurance claim audits, and similar one-off audits with specific documentation requirements.

Audit support — what we do at each stage

Pre-audit (4 to 8 weeks before)

• Audit scope definition and methodology agreement with auditor or audit committee.
• Inventory data quality assessment — current variance rates, known reconciliation gaps.
• Count plan design — ABC analysis, location-by-location scheduling, freeze plan.
• SOPs for counters, supervisors, and audit observers.
• Documentation templates — count sheets, variance investigation forms, reconciliation reports.
• Pre-audit reconciliation — clean up known variances before the formal count.

During the audit

• Real-time count tracking and result entry.
• Variance flagging and same-day recount coordination.
• Exception handling — items not found, items found in wrong location, damaged stock.
• Live support for external auditor questions and sample testing.

Post-audit

• Full variance investigation and root-cause classification.
• Adjustment posting with documented justification per item.
• Reconciliation between system inventory and audited inventory.
• Formal audit report with variance summary, value impact, and recommendations.
• GL adjustment support working with your accounting team.
• Post-audit operational recommendations to reduce future variance.

Why audit work travels offshore well

The physical observation portion of audits stays on-site (your team plus external auditor representatives where required). But the surrounding work — planning, documentation, data entry, variance investigation, reconciliation, and reporting — is exactly where in-house teams underinvest because the audit is a once-a-year event:

• Document-driven — count sheets, variance reports, auditor inquiry responses. All of it lives in files.
• Methodology-driven — well-defined SOPs make the work consistent and repeatable.
• Calendar-bounded — audit work concentrates in specific weeks, fitting well to project-based offshore engagement.
• Detail-intensive — and detail-intensive work is where focused offshore teams produce cleaner output than stretched in-house teams.
• Documentation-output focused — the deliverable is a written audit report, which is the kind of work offshore teams produce reliably.

Engagement structure

• Annual physical audit support — point-in-time project for the annual count event, typically 6 to 10 weeks of work spread across pre/during/post audit phases.
• External auditor preparation retainer — quarterly preparation work building toward the annual external audit visit.
• Internal audit support retainer — ongoing quarterly internal audit sample work.
• Special-purpose audit project — fixed-scope engagements for acquisition diligence or similar one-off audits.

Documentation we produce

Audit work is judged on documentation quality. Standard deliverables we produce:

• Audit plan document — scope, methodology, schedule, team assignments.
• Count sheets and result documentation per location.
• Variance investigation log with root-cause classification per material variance.
• Reconciliation summary tying physical results to system inventory.
• Adjustment journal with documented justification.
• Formal audit report — executive summary, methodology, findings, value impact, recommendations.
• Auditor working papers compatible with external auditor documentation requirements.
• GL adjustment support documentation for accounting team.

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