Inventory Controls

Gain a hands-on view of every aspect of the control environment for inventory, including the following: purchasing, receiving, storage, production, shipping, returns, counts, adjustments, valuation, and the period-end cutoff. You will learn how well-designed procedures connect warehouse activities to accounting records, reduce errors, reveal inventory losses, and give management better information for purchasing, production, fulfillment, and reporting decisions.
Format

PDF Course

Course Lists
Grid View
Tile View
Duration

14 Hours

Course Discounts 
Education Bundles

Course Information

Author: Steven Bragg
Course number: AC1184
Not Acceptable for: Enrolled Agents

Learning Objectives
  • Recognize the objectives associated with inventory controls.
  • Recall the control types that support the different inventory objectives.
  • Recognize why inventory controls are important to financial reporting.
  • Specify the conditions that can increase inventory risks.
  • Recall when expiration controls should be used.
  • Recognize the risks associated with unauthorized inventory adjustments.
  • Recall the conditions causing higher operational inventory risk.
  • Recognize the need for blind receiving.
  • Specify the evidence used for inventory receipts.
  • Recall who should verify quantities received.
  • Recognize the functions that should be separated from inventory custody.
  • Recall why warehouse staff should have limited access to some records.
  • Recognize the combinations of duties that increase inventory-related risks.
  • Specify which controls improve physical counts.
  • Recall the documents that support billing.
  • Recognize why billing and shipping activities should be separated.
  • Recall the functional area that should manage billings.
  • Recognize the different types of compensating controls.
  • Specify the controls that prevent unauthorized purchases.
  • Recall the reason why purchase requisitions are used.
  • Recognize the controls used to avoid buying from inappropriate suppliers.
  • Recall the controls that cover damaged goods.
  • Recognize the controls for the over-shipment of goods.
  • Specify why receiving cutoff is so important.
  • Recall the controls used to protect high-value goods.
  • Recognize why bin location controls are needed.
  • Recall the warehouse situations that weaken inventory controls.
  • Recognize the main controls for item master records.
  • Specify the reasons why units of measure can cause control problems.
  • Recall the types of technology that can automatically track inventory.
  • Recognize why lot and serial number tracking is useful.
  • Recall the nature of perpetual inventory records.
  • Recognize the conditions indicated by a negative inventory balance.
  • Specify the risks associated with backflushing.
  • Recall why inventory records should be reconciled to the general ledger.
  • Recognize why bills of material should be tightly controlled.
  • Recall the issues that can distort work-in-process inventory levels.
  • Recognize the role that scrap reporting plays in monitoring production.
  • Specify the different types of inventory transfer controls.
  • Recall the risks associated with in-transit inventory.
  • Recognize why intercompany transfers need to be controlled.
  • Recall the controls that can prevent the unauthorized movement of inventory.
  • Recognize the documents that support a shipment release.
  • Specify the controls that can reduce picking errors.
  • Recall how controls can minimize shipping cutoff errors.
  • Recognize the control issues related to customer pickups.
  • Recall the controls related to drop shipments.
  • Recognize the processing steps for the issuance of a credit memo for returned goods.
  • Specify the risks related to warranty and repair returns.
  • Recall the main reasons for count planning.
  • Recognize how count tags provide control over physical counts.
  • Recall the methodology for resolving count variances.
  • Recognize the reason for using an ABC inventory classification.
  • Specify which inventory classification should be counted most frequently.
  • Recall why cycle counters need to be independent.
  • Recognize how to use root cause analysis in detecting inventory issues.
  • Recall the circumstances under which cycle counts can replace a physical count.
  • Recognize the documentation needed to support inventory adjustments.
  • Specify why adjustment trends should be closely monitored.
  • Recall how an aging report can be used to spot inventory issues.
  • Recognize the conditions that require an inventory write-down.
  • Specify the controls that can reduce fraud risk.

Level: Overview
Instructional Method: QAS Self-Study
NASBA Category: Accounting
Prerequisites: None
Advance Preparation: None
Latest Review Date: July 2026
Program Registration Requirements: Click on the Enroll button to pay for and access the course. You will then be able to download the course as a PDF file, then take an on-line examination, and then download a certificate of completion if you pass the examination.
Program Refund Policy: For more information regarding administrative policies concerning complaints, refunds, and other matters, see our policies page.

AccountingTools, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.
The NASBA sponsor identification number for Accountingtools, Inc. is 115881.

AccountingTools is an IRS Approved Continuing Education Provider. We are compliant with the requirements for continuing education providers (as described in sections 10.6 and 10.9 of the Department of Treasury’s Circular No. 230 and in other IRS guidance, forms, and instructions). Our IRS Approved Continuing Education Provider number is 72821.