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Physical Verification Plan — SA 501 Inventory & PPE Count Format

Plan and document the year-end count in one paper: location schedule, the SA 501 procedures checklist (floor-to-sheet, cut-off documents, third-party stock), test-count record, and the CARO 10% discrepancy conclusion — editable in Word.

Free · CORAA original — SA-aligned
Updated 18 Jul 2026
Standards
SA 501 + CARO 2020 3(i)(b), 3(ii)(a)
Covers
Inventory (RM/WIP/FG) + PPE verification
Tests
Floor-to-sheet, sheet-to-floor, cut-off, third-party
Output
Test-count record + 10% discrepancy conclusion
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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.

PHYSICAL VERIFICATION PLAN & COUNT WORKING PAPER

Entity: ___ · Year ended: ___ · Prepared by: __________ · Reviewed by: __________

Purpose: plan and document attendance at physical inventory counting (SA 501) and physical verification of property, plant and equipment — the evidence feeding CARO 2020 clauses 3(i)(b) (PPE verified at reasonable intervals) and 3(ii)(a) (inventory verified, coverage and procedure appropriate, 10% class discrepancies).

Part A — Scope and schedule

↑ 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, no email gate, nothing stored. Edit freely in Word, Google Docs or Pages before sending to your client.

Common questions

FAQs.

Is the auditor required to attend the physical inventory count?
SA 501 requires attendance when inventory is material — unless impracticable, in which case alternative procedures must give sufficient appropriate evidence, and if they cannot, the report is modified. Attendance means evaluating management’s instructions, observing the count, inspecting the stock and performing test counts — not merely being present.
What if the count happens on a date other than the year end?
Permitted where controls over inventory movements allow reliable roll-forward or roll-back: the auditor tests the intervening movements between count date and balance-sheet date. Record both the count-date quantities and the reconciliation to year-end book quantities in this working paper.
What does CARO 2020 require on physical verification?
Clause 3(i)(b): whether PPE was physically verified by management at reasonable intervals and whether material discrepancies were properly dealt with. Clause 3(ii)(a): whether inventory was physically verified at reasonable intervals, whether coverage and procedure were appropriate, and whether discrepancies of 10% or more in aggregate for each class of inventory were noticed and dealt with in the books — which is why this template forces a per-class discrepancy conclusion.
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