Things to pay attention to by auditor during stock take:
- to walk around the warehouse / factory to observe if there is any physically impaired/ damaged items.
- if the items are damaged, to check if these damaged items are included i stock listing (if yes, then request client to write off the inventory items)
- to check if the damaged items are properly segregated, as the client might put the damaged item in along with normal goods and resulted in overstatement of inventory.
- if the items appeared to be dusty, check with client if the items are saleable. ( potential provisoin for inventory issue).
Rule of thumb: to observe the physical condition of stocks and report any stock obsolescence.