Internal Controls for Inventory Accounting - Explained
What are Internal Controls for Inventory?
Written by J. Mance Gordon
Updated at April 18th, 2024
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What is an Internal Control for Inventory?
The most common type of internal control for inventory is to take a physical account of inventory at least once a year. When taking inventory we want to make sure that we use pre-numbered inventory tickets to link the purchase order, to the receiving order, to the payables number, the check number, etc.
With internal controls, I want to make sure the person who's counting is different from the one that has the custody of inventory. This allows you to have a check on individual activity when verifying the quantity and availability.
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