Inventory observation

An inventory observation is the oversight of a client's inventory counting process by an outside auditor. This oversight work includes a number of tasks, including the following:

  • Verifying that all inventory was counted

  • Testing a sample of the counts made by client employees

  • Reviewing the client's counting policies and procedures

  • Reviewing the extended cost calculations made by employees

Related Courses

How to Audit Inventory 
How to Conduct an Audit Engagement