Question

Assignment 2: A Grocery Store Audit

Provide an original and substantive response to the questions posed in your Assignment in a minimum of 200 words. See Assignment rubrics here.

You learned in your Reading about the risks and internal control structure for inventory. Grocery stores present unique challenges with inventory. In addition to a high volume of transactions, there are also temperature and shelf-life considerations for certain items.

Discuss how you would approach an inventory audit of a grocery store and address the issues of:

storage,

product expiration,

how you would “count” the inventory for items such as bulk peanuts, watermelons, etc.

Answer 1

There are many considerations in a grocery audit when it comes to keeping the inventory safe and the financial reporting accurate. The first step would be to check the receipt tapes in the store. Warehouses maintainn copies of receiving documents and send them to the store. This documentation is necessary to ensure that inventory transactions occured.

As far as storage is considered, the perishable items such as vegetables and fruits should be stored in lower temperatures. The other items can be stored on normal shelves. I would ensure that this procedure is followed.

When a product is sold, the barcode of the product is scanned. This contains the manufacturing and expiry date. I would ensure that the system is equipped to give out a warning signal in case a product has passed its expiry date so that an expired product is never sold.

Counting of items such as peanuts will have to be done in terms of kilogram i.e. the kgs purchased , sold and left.