What it is
Retail and online sellers book many small transactions, hold large inventory and carry estimates for returns, gift cards and loyalty. The audit risk sits in cutoff, processor settlements, returns, shrink and unrecorded sales tax.
The program is a five-tab workbook covering revenue, cash and processors, returns, gift cards and loyalty, inventory and vendors, and sales tax, leases and compliance.
When to use it
- Auditing a store-based retailer, online seller, marketplace seller or omnichannel business.
- Testing the returns reserve and gift card liability at year end.
- Planning inventory observation across many locations.
What’s inside
- Register, platform and processor settlement tests
- Returns reserve, gift card, breakage and loyalty procedures
- Inventory observation, shrink, costing and vendor allowance tests
- Sales tax, economic nexus, lease and security incident steps
Standard cited
This template follows ASC 606 / ASC 330. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
How is breakage tested?
The program tests the entity’s redemption history and the pattern used to recognize breakage, and the unclaimed property rules that can limit it.
Does it cover marketplace sales?
Yes. It includes a principal versus agent step and a marketplace facilitator step for sales tax.
How many stores should be observed?
Select by risk and size under your sampling policy. The program does not fix a number.
Related templates
- Retail Sales Returns Reserve Calculation
- Retail Gift Card Liability and Breakage Schedule
- Inventory Observation Memo and Test Count Sheet (AU-C 501)
- Lower of Cost or NRV Inventory Test (ASC 330)
Last updated 11/05/2026. All free templates.