ICAI Guidance over “Physical Inventory Verification – Key Audit Considerations amid COVID 19”

Physical verification of inventory is the responsibility of management of the entity. Management is required to establish procedures under which inventory is physically counted at least once a year to ensure existence, condition and support valuation of inventory.

Further, the Auditor needs to comment over the physical verification of Inventory under The Companies (Auditor’s Report) Order, 2016 (CARO 2016). Additionally, SA 500 “Audit Evidence” prescribes that the objective of the auditor is to design and perform audit procedures in such a way as to enable the auditor to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the auditor’s opinion

ICAI has come up with the Auditing Guidance on “Physical Inventory Verification – Key Audit Considerations amid COVID 19” on 13th May 2020 for the benefits of its members. For more details, please go through the attached document: ICAI Guidance on Physical Inventory Verification-Key Audit Considerations amid Covid 19


The information contained herein is in summary form of Guidance Issued by Auditing and Assurance Standards Board of ICAI and is based on information available in public domain. While the information is believed to be accurate to the best of our knowledge, we do not make any representations or warranties, express or implied, as to the accuracy or completeness of this information. Reader should conduct and rely upon their own examination and analysis and are advised to seek their own professional advice. This note is not an offer, invitation, advice or solicitation of any kind. We accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies upon it.

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