As we continue to navigate our way through lockdown, our audit team had the unprecedented challenge of performing Ecovis’ first ever virtual stock take. We'd like to share our experience and what we learned from our virtual stock take, as they may become the new normal.
COVID has changed many things, but the requirement for auditors to attend stock takes is not one of them! ISA 501 requires auditors to attend stock counts where stock is material, unless impractical, to provide audit evidence relating to existence and condition. Failure to attend a stock take is likely to lead to a modified opinion in the auditor’s report – something which understandably clients want to avoid. Doing a virtual stock take is one way around this.
It is important to consider the risks associated with a virtual stock take. ICAEW gives the following examples of risks/limitations:
Overall, whilst there were some challenges in terms of the tech and time taken, it went smoothly and the client was very happy. We intend to replicate things this week for another of their stock locations.
For anyone planning on doing a virtual stock take in the future here are our top tips: