Internal control and deontology - Chapter 6 B. Stock Cycle

time
Excess stock
Theft, damaging, ageing
Incorrect registration of stock movements
2. The warehouse
Centralized or decentralized
Conditions that have to be met:
Closed/secured area
Only release and acceptance when authorized
Warehouseman needs to have information about stock movements
Open warehouse

Internal Control: Chapter 6 B: Stock Cycle

document (= authorisation) coming from sales or production (purchasing?)
Copy of release doc goes to stock/inventory records department
3.2. Acceptance/reception of goods
Authorisation from purchasing (sometimes sales)
Warehouseman should evaluate quantity and quality
Warehouseman creates reception document
1 ? warehouse
1 ? purchasing
1 ? invoice control
1 ? stock/inventory records
To write off or destroy stock ? approval/authorisation needed!

Internal Control: Chapter 6 B: Stock Cycle

from stock/inventory records
2.3.4. Stock/inventory records
Administration of stock items – quantity and value
Purpose:
Being able to permanently determine the theoretical stock ? to calculate cost of goods sold ? intermediate result
Keeping track of stock mutations to determineand evaluate the correctness and value of the stock
Provide purchasing, sales and production with information regarding stock (levels and value)
Provide ‘invoicing’ with information
Indicating excess stock and aged/obsolete stock
Role: applying valuation methods to stock (Lifo, Fifo, …)

Internal Control: Chapter 6 B: Stock Cycle