Non-Physical Inventory Verification during COVID-19 pandemic

Abstract

This study aims to explore the perspective of auditors and audit assistants regarding key audit consideration of physical inventory verification without a site visit amid COVID-19. Data collection tool bases a questionnaire survey from 114 respondents. The statistical analysis comprises of both descriptive (average, minimum, maximum) and inferential statistic (Mann-Whitney U test and Kruskal–Wallis test regarding).

The analysis reveals that respondents are more likely to put their effort on test of controls, following by test of details and analytical procedures. On the test of controls, the respondents focus on detecting high-risk of inventory modifications and are less likely to use the work of internal auditors. On test of details, they use data analytics to verify the ending inventory balance, unusual items during the year and underweight of cycle inventory count information. Finally, on analytical procedures, the respondents employ data analytics to scrutinize the relationships of inventory and related accounts, and are less likely to compare inventory data with previous periods. Furthermore, the study finds out that factors affecting alternative audit procedures of inventory count include the type of audit firms, client firm size. This study is benefit to auditors who develop the use of alternative audit procedures in physical Inventory count.