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INTERNAL CONTROL QUESTIONNAIRE - INVENTORY MANAGEMENT

buickregal (One-Way Highway)
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QUESTION Analytical Procedures and Management and Independent Controls 1. Is there a policy and procedures document for inventory management system? If yes, inspect document. Is it communicated to the staff responsible for inventory management? 2. Are all adjustments to inventory approved by the Managing Director/senior management? If yes, how is this evidenced? 3. Does management review and follow up reports of inventory turnover, ageing, write-downs, physical inventory adjustments, returned inventory? Inventory Type 4. What types of inventory does this company carry (classify into categories)? Safeguarding of physical inventory 5. Where is inventory stored? 6. Who has custody of the inventory at these locations? Name and position. 7. What controls are in place to prevent unauthorized access to the physical inventory? 8. Is there a proper layout plan of the inventory storage facility? Describe the layout of the storage facility. Auditor should tour facility and observe signs, movement of goods. 9. Is there a separate area for receiving and distributing inventory? 10. Are adequate and operational fire prevention and containment facilities provided and are they tested regularly?

Purchasing Process 11. Is purchasing for the locations centralized or decentralized? 12. How are orders for inventory initiated? Procedure and documents involved are required. 13. Who prepare and approved purchase requisitions? 14. Who prepares and approves purchase orders? 15. Are purchase orders pre-numbered? 16. Where are blank forms stored? Who has access to storage area? 17. Where are purchase orders and requisition filed? Receival Process 18. How are goods received into inventory? 19. Who counts goods received? 20. Describe the receival document used to record goods received into inventory. 21. Are tags placed on goods after they are placed in storage indicating details of shipment? 22. Who is responsible for storage of goods received? Distribution Process

23. How are goods distributed from inventory? Explain process and documents involved. 24. Who counts goods issued? 25. What controls are in place to ensure that all inventory leaving the premises have a valid invoice? 26. Are invoices stamped with the delivery date before leaving the warehouse? 27. Are delivery slips used? How are they generated and filed on return? Goods Returned (Inwards) Process 28. What is the procedure for receiving goods returned by customers? Note documents involved. 29. Is the reason for return documented? 30. Who counts goods returned? 31. Who approves goods returned by customers? 32. How are goods delivered to customers? 33. Are delivery vehicles owned or contracted by the company? Are drivers assigned to delivery vehicles? Goods Returned (Outwards) Process 34. What is the procedure for returning goods to the supplier? Note documents involved. 35. Is the reason for the return documented? 36. Who approves goods returned to suppliers?

Stocktaking Process 37. Is there a documented procedure for stocktaking? If yes, is it given to the staff at each stock taking activity? 38. If no, how is staff informed of the stocktaking procedures? 39. If no, auditor should document stocktaking procedures. 40. Auditor should obtain copy of count sheet, inspect and make note of any weaknesses. 41. How are the count teams made up? Ensure that someone who knows about the inventories as well as someone independent is included in the count teams. 42. Does the count team sign off count sheets? 43. Are cut-off procedures established and communicated to staff? 44. What procedures re in place to identify goods held for third parties? 45. What procedures are in place to prevent double counting and to avoid accounting for goods at locations twice? 46. Who reviews count sheets? Does the reviewer sign the count sheet as evidence of his/her review? 47. How often is full stock count done? When was the last 3 done? 48. Are cycle counts performed? If yes how often are they done? 49. Who supervises the stocktaking process? 50. What action is taken if quantities counted by two separate teams disagree? 51. How are goods received at the time of stocktaking? 52. How are goods distributed at the time of stocktaking? 53. How are damaged goods identified and handled? 54. How are obsolete goods identified and handled? 55. Is a reconciliation between physical inventory and general ledger?

56. Who enters count results into the inventory system? When is it entered? 57. What controls exist to ensure that input figures agree to the count sheets? Valuation and Record Keeping 58. Is the perpetual or periodic method used to record inventory movements? 59. What method of costing is used for inventories? 60. How is costing performed? Auditor should obtain a breakdown of costs. 61. Who records quantities received in the inventory perpetual system? 62. What document is used to record quantities recd? 63. What controls are in place to ensure that only quantities received are paid for? 64. Who records quantities sold or transferred in the inventory perpetual system. 65. What document is used to record quantities sold? 66. Who records goods returned by customers in the inventory perpetual system? 67. What document is used to record goods returned inwards? 68. What document is used to record goods returned outwards? 69. How are damaged items identified, valued and recorded? What is the accounting entry? 70. What is the procedure for making adjustments to inventory? Information Systems Control 71. Is the inventory management system computerized? If yes what is the name and version of the software. 72. How many modules does the software have? What are their names and what are they used for? 73. How long has the software been in use? 74. Have there been any problems with the software? If yes, describe problems? 75. How are problems reported and to who? 76. Is a log kept of the system downtime and errors? 77. Who has access to the inventory module? 78. Are passwords used to restrict access to the inventory module to authorized personnel only? 79. Can data fields be overridden after data is saved?
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URL: http://www.rolia.net/f/post.php?f=41&b=0&c=0&tno=5279&pno=39172&

HOME / / Font Size

INTERNAL CONTROL QUESTIONNAIRE - INVENTORY MANAGEMENT

buickregal (One-Way Highway)
: : f / t e n a i l o r . w

QUESTION Analytical Procedures and Management and Independent Controls 1. Is there a policy and procedures document for inventory management system? If yes, inspect document. Is it communicated to the staff responsible for inventory management? 2. Are all adjustments to inventory approved by the Managing Director/senior management? If yes, how is this evidenced? 3. Does management review and follow up reports of inventory turnover, ageing, write-downs, physical inventory adjustments, returned inventory? Inventory Type 4. What types of inventory does this company carry (classify into categories)? Safeguarding of physical inventory 5. Where is inventory stored? 6. Who has custody of the inventory at these locations? Name and position. 7. What controls are in place to prevent unauthorized access to the physical inventory? 8. Is there a proper layout plan of the inventory storage facility? Describe the layout of the storage facility. Auditor should tour facility and observe signs, movement of goods. 9. Is there a separate area for receiving and distributing inventory? 10. Are adequate and operational fire prevention and containment facilities provided and are they tested regularly?

Purchasing Process 11. Is purchasing for the locations centralized or decentralized? 12. How are orders for inventory initiated? Procedure and documents involved are required. 13. Who prepare and approved purchase requisitions? 14. Who prepares and approves purchase orders?

15. Are purchase orders pre-numbered? 16. Where are blank forms stored? Who has access to storage area? 17. Where are purchase orders and requisition filed? Receival Process 18. How are goods received into inventory? 19. Who counts goods received? 20. Describe the receival document used to record goods received into inventory. 21. Are tags placed on goods after they are placed in storage indicating details of shipment? 22. Who is responsible for storage of goods received? Distribution Process 23. How are goods distributed from inventory? Explain process and documents involved. 24. Who counts goods issued? 25. What controls are in place to ensure that all inventory leaving the premises have a valid invoice? 26. Are invoices stamped with the delivery date before leaving the warehouse? 27. Are delivery slips used? How are they generated and filed on return? Goods Returned (Inwards) Process 28. What is the procedure for receiving goods returned by customers? Note documents involved. 29. Is the reason for return documented? 30. Who counts goods returned? 31. Who approves goods returned by customers? 32. How are goods delivered to customers? 33. Are delivery vehicles owned or contracted by the company? Are drivers assigned to delivery vehicles? Goods Returned (Outwards) Process 34. What is the procedure for returning goods to the supplier? Note documents involved. 35. Is the reason for the return documented? 36. Who approves goods returned to suppliers?

Stocktaking Process 37. Is there a documented procedure for stocktaking? If yes, is it given to the staff at each stock taking activity? 38. If no, how is staff informed of the stocktaking procedures? 39. If no, auditor should document stocktaking procedures. 40. Auditor should obtain copy of count sheet, inspect and make note of any weaknesses. 41. How are the count teams made up? Ensure that someone who knows about the inventories as well as someone independent is included in the count teams. 42. Does the count team sign off count sheets? 43. Are cut-off procedures established and communicated to staff? 44. What procedures re in place to identify goods held for third parties? 45. What procedures are in place to prevent double counting and to avoid accounting for goods at locations twice? 46. Who reviews count sheets? Does the reviewer sign the count sheet as evidence of his/her review?

47. How often is full stock count done? When was the last 3 done? 48. Are cycle counts performed? If yes how often are they done? 49. Who supervises the stocktaking process? 50. What action is taken if quantities counted by two separate teams disagree? 51. How are goods received at the time of stocktaking? 52. How are goods distributed at the time of stocktaking? 53. How are damaged goods identified and handled? 54. How are obsolete goods identified and handled? 55. Is a reconciliation between physical inventory and general ledger? 56. Who enters count results into the inventory system? When is it entered? 57. What controls exist to ensure that input figures agree to the count sheets? Valuation and Record Keeping 58. Is the perpetual or periodic method used to record inventory movements? 59. What method of costing is used for inventories? 60. How is costing performed? Auditor should obtain a breakdown of costs. 61. Who records quantities received in the inventory perpetual system? 62. What document is used to record quantities recd? 63. What controls are in place to ensure that only quantities received are paid for? 64. Who records quantities sold or transferred in the inventory perpetual system. 65. What document is used to record quantities sold? 66. Who records goods returned by customers in the inventory perpetual system? 67. What document is used to record goods returned inwards? 68. What document is used to record goods returned outwards? 69. How are damaged items identified, valued and recorded? What is the accounting entry? 70. What is the procedure for making adjustments to inventory? Information Systems Control 71. Is the inventory management system computerized? If yes what is the name and version of the software. 72. How many modules does the software have? What are their names and what are they used for? 73. How long has the software been in use? 74. Have there been any problems with the software? If yes, describe problems? 75. How are problems reported and to who? 76. Is a log kept of the system downtime and errors? 77. Who has access to the inventory module? 78. Are passwords used to restrict access to the inventory module to authorized personnel only? 79. Can data fields be overridden after data is saved?
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Sample Inventory management Questionnaire:

Q.1) Name of the Company: __________________ Q.2) Date: ___________________ Q.3) what are the Inventory Items your company have? Q.4) Describe the method which your company uses to categorize the items? Q.5) Basic Information about the Items: (a) What is the Serial number for the items? (b) What is the Item category? (c) What is the unit of measurement used? (d) What is the receiving location of the items? (e) Describe in detail, the purchasing information If Any? (f) Inspection required flag? (g) Any other Information?