We haven’t had a thorough stocktake at the office for the longest time but no one at the management level seemed to worry much about it.
However, a recent asset audit revealed a worrying trend at the office.
Our company trades in household equipment so chances of damage, theft, and inventory misappropriation is high. When the external audit team arrived, they started with the most sensitive department of the business – the store. As part of the internal audit team, I was tasked with overseeing that the audit of the heating and cooling equipment went on smoothly. When I presented the audit team with the inventory register, they started by identifying every item one by one. I had to be on standby to provide an explanation about stock variations for most items such as the washable filter, wireless thermostat, hot water boiler, and air purifier. Larger items like the oil furnace and propane boiler were only supplied on demand. All seemed well documented except for new HVAC systems that were supplied a few months back. When the air conditioning technician couldn’t explain the stock movement for equipment and parts he uses for air conditioning repair service, HVAC maintenance and air duct cleaning, the audit traced gaps all the way to the air conditioning supplier. The severity of the matter caught the attention of the directors who requested an explanation of how internal controls are implemented to capture movement of all incoming and outgoing equipment. When the final audit revealed that at least parts of the quality air conditioner went missing with every requisition, both the technician and the storekeeper were dismissed. Internal controls have since been tightened and measures taken have resulted in better inventory management.