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Inventory Management Internal Audit Checklist

A risk-and-control checklist for inventory management — physical stock, valuation/provisioning, stock movement and stores issue — with space for your own test results.

Free · CORAA original — SA-aligned
Updated 28 Jul 2026
Standard
SIA 220 / SIA 330
Cycle
Inventory
Key risk
Shrinkage, obsolete stock, unauthorised movement
Format
Microsoft Word (.docx)
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Your firm — letterhead
Appears at the top of the document as the audit firm letterhead.
Used as the letterhead block.
Engagement details
The client and period this document is for.
What’s inside

An excerpt from the template.

INVENTORY MANAGEMENT — INTERNAL AUDIT CHECKLIST

Entity: ___ · Period: ___

Scope: physical stock, valuation/provisioning, stock movement and stores issue. Prepared per SIA 220 and SIA 330.

Risk & Control Matrix

↑ Excerpt only — the full template is what you download as Word
About this template

What you’re downloading, and when to use it.

This template follows the format published by the Institute of Chartered Accountants of India (ICAI) in the AASB Audit Working Paper Templates (June 2023), the authoritative reference for Indian statutory-audit documentation. Fill in your firm’s letterhead and the engagement details on the form above, click Download Word file, and you’ll get a fully formatted .docx ready to use.

Everything is generated in your browser and on a stateless API endpoint — no account, nothing stored on our servers. We’ll ask for a work email once before your first download so we can send you the file and the occasional relevant update; after that, downloads on this device are instant. Edit freely in Word, Google Docs or Pages before sending to your client.

Common questions

FAQs.

How does this checklist differ from a stock audit report?
A stock audit report (see our Stock Audit Report template) documents a single physical verification exercise at a bank/lender's request, usually as at a specific date. This checklist instead tests whether the entity's ONGOING inventory controls — cyclical verification, provisioning policy, movement authorisation — are designed and operating correctly across the period, independent of any one verification event.
What is a reasonable tolerance for physical stock verification variances?
There is no single prescribed number — it depends on the nature of the inventory (a low-value, high-volume item tolerates a wider variance than a high-value, low-volume one) and the entity's own materiality. What matters for the control test is that a tolerance threshold is DEFINED and DOCUMENTED in advance, and that variances beyond it are actually investigated rather than just noted and carried forward.
Why is "ageing-driven provisioning" listed as a detective control rather than a valuation policy?
The accounting policy for provisioning (e.g. providing X% at 6 months, Y% at 12 months) is the valuation basis; the control being tested here is whether that policy is actually APPLIED consistently every period against the real ageing data — a policy that exists on paper but isn't systematically run against current stock ageing is a control gap even if the accounting policy itself is fine.
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