Inventory Audit – using eQuip! to support Inventory Auditing
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Every organizations, private businesses and government agencies, have to do inventory audit once or twice a year. It’s not only sound financial management. It is also required by external rules and regulations, such as Sarbanes-Oxley, or contract and grant guidelines such as FAR 52.245.1 or 44 CFR.
In general, there are two types of inventory audit methods:
- Statistical sampling
- Wall to Wall inventory audit
For best practices, inventory audit should be integrated in day to day enterprise asset management. The eQuip! Enterprise Asset Management software supports this by automatically identifying the assets needing audit on the Dashboard. The software identify two types of assets and remind the users to perform audit on them.
- Assets that haven’t been electronically updated in the past 6 months (or shorter). Since these asset records haven’t been updated by any users, it is highly likely that these physical assets haven’t been used by anyone therefore an inventory audit is needed to verify their existence and condition.
- The eQuip! Enterprise Asset Management software will randomly select a percentage of total active assets (10% or 15%) and remind the users to perform audit on them. By doing this, the software supports statistical sampling method of performing inventory audit continuously.
Wall to Wall inventory audit is not always required. But it’s common in some of the following circumstances:
- When an organization is transitioning to an automated asset management system and wants to make sure all the date being migrated to the system is complete and update to date.
- When a government contractor is starting a new contractor or closing out an existing contract, it needs to report and reconcile the inventory of Government Furnished Property.
- Some organizations require a Wall to Wall inventory audit to be done every couple of years.
At E-ISG Asset Intelligence, we recommend the 5-step methodology to conduct Wall to Wall inventory audit. A detailed guide for how to use eQuip! to support these 5 steps can be found on our support site here.