Improving the audit of inventory

The article contains comments on improving the accounting and auditing of inventory depreciation based on international accounting standards. Inventories mean stocks of products and goods. In manufacturing activities, this usually consists of raw materials, partially finished goods (work in progress) and finished goods expected to be sold to customers. In a retail or wholesale activity, inventories include stocks of goods purchased primarily for resale. The value of inventories affects the cost of sales shown on the statement of comprehensive income and thus directly affects profit. In addition, the value of inventories is often significant, so even a small error in their valuation can result in a significant loss of profit.