The COVID-19 pandemic made it difficult for companies and their auditors to conduct on-site inventory observations. In many cases, the work-around was video technology for auditors to observe counts remotely. There was also greater reliance on statistical sampling by management to verify inventory quantities. These transformative and cost-saving solutions are highly likely to become common practice after the pandemic.
In the past year, auditors have adopted remote observation procedures—with counters using small portable video devices, such as smart glasses or hat-mounted cameras, feeding images to offsite observers. This approach not only mitigated health risks, but also proved to be more flexible, faster, and more cost-effective than traditional on-site observation.
The pandemic also saw the expanded the use of statistical sampling by management to verify inventory quantities. Sampling experts can train employees to use random sampling techniques that use small number of items to derive a conclusion about the quantities for the entire inventory balance. Together, these approaches can bring inventory counting into the 21st century and reduce costs.