What it is
A physical count only supports the books if every tag is accounted for and every count is independent. Tag control and a second count are the two controls that matter most.
The tag log has 100 rows with location, item, first and second count by different counters, agreed quantity after recount, unit cost, value and variance to the perpetual record. Flags show recounts and investigations. The Control tab checks the tag sequence for missing and duplicate tags and totals the counted value.
When to use it
- Year-end and cycle counts.
- Client-prepared counts that the auditor will observe.
- Investigating inventory variances.
What’s inside
- 100-row tag log with two counts and final quantity
- Variance quantity and value against the perpetual record
- Recount and investigate flags
- Control tab: missing, duplicate and out-of-range tags
Standard cited
This template follows 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 are tags controlled?
Tags are numbered, issued by area and each ends as Used, Void or Unused. The Control tab shows any tag number that is not accounted for.
Who does the second count?
A different person. The sheet has separate counter columns.
Does the sheet post adjustments?
No. Investigate variances and approve any adjustment outside the sheet.
Related templates
- Inventory Observation Memo and Test Count Sheet (AU-C 501)
- Audit Program: Inventory
- Lower of Cost or NRV Inventory Test (ASC 330)
- Manufacturing Inventory and Cost Accounting Audit Checklist
Last updated 11/05/2026. All free templates.