Physical things the business owns.
WHAT THE RISKS ARE
Theft by staff, customers or outsiders Stock recorded but absent Assets disposed of without authority Damage and obsolescence unrecorded Stock used without being recorded
WHAT CONTROLS ADDRESS THEM
Physical security and restricted access Recording of receipts and issues Counting, and reconciliation to records Authorisation for disposals Investigation of differences
WHY COUNTING MATTERS MOST
Records are only as good as their agreement with reality.
HOW OFTEN
Periodically in full, and continuously by rotation for high-value items.
WHY ROTATION
It detects problems sooner than an annual count.
WHAT TO ESTABLISH
That counting is done by someone other than the custodian.
WHY
Custodians counting their own stock is not a check.
WHAT TO DO ABOUT DIFFERENCES
Investigate them, and record the explanation.
WHY
Adjusting records to match the count without explanation conceals the loss.
WHAT TO TRACK
Differences over time, by location and item.
WHAT PATTERNS INDICATE
Persistent losses of specific items suggest theft rather than error.
WHAT TO MAINTAIN FOR ASSETS
A register: what, where, when acquired, cost, and who is responsible.
WHY
Assets not recorded are not missed.
WHAT TO VERIFY
The register against physical presence, periodically.
WHAT TO CONTROL
Disposals, with authorisation and record of proceeds.
WHY
Disposal is how assets leave legitimately, and it is used to conceal removal.
WHAT TO ESTABLISH ABOUT PERSONAL USE
What is permitted, and recorded.
