Guide
Inventory Count Observation: What Counts as Good Evidence
Auditors attend counts to see whether quantities exist and whether your counting instructions work in practice. A tidy warehouse with labeled bins and frozen movement during the count produces stronger evidence than a busy floor with unrecorded transfers.
Cutoff matters as much as quantity. Goods received near year-end need matching receiving reports and purchase accruals. Goods shipped need matching sales invoices or deferred revenue treatment. Share the shipping and receiving logs with the observation team on the day.
Slow-moving and damaged stock deserve honest tagging. Writing them down after the auditor leaves creates reconciling items and erodes trust. Provide the scrap and obsolescence policy before the count so write-down testing can run in parallel.
Multi-site groups in Taiwan often stagger counts. Coordinate calendars so the engagement team can cover material locations or arrange supervised local counts with photographic and sheet controls. Surprises on location lists are expensive.