SyCip Gorres Velayo & Co.

6760 Ayala Avenue

1226 Makati City
Philippines

Tel: (632) 891 0307

Fax: (632) 819 0872
ey.com/ph

Internal memorandum
To:

File

September 24, 2015

From: Engagement Team

Ref:

Inventory Stocktake Memorandum

Count Details
Name of Entity:

Robinsons Daiso Diversified Corporation

Location:

Robinsons Galleria (Selling and Storage Area)

Address:

3rd Floor Robinsons Galeria, Ortigas Ave, Ortigas Center,

Mandaluyong, Metro Manila

Date and Time

September 21, 2015 10:00pm to 3:00am

SGV Representatives:
(1) Jhon Bryan M. Ramos, Associate
(2) Kristine Joy M. Labador, Associate
Personnel Incharge: (1) Rosa Bartolome, Operation Manager
(2) Soccorro Fermin, Store Manager
Items counted:
belongings

Retail items for household use, school supplies and personal

Background/Objectives:
We attended the count as EY FAS professional, only observing the conduct of the inventory
count and assessing whether the inventory count procedures were followed. This is
conducted to ensure the sufficiency of the clients work and assess whether the procedures
performed are adequate to assert the existence, completeness, and valuation of, and rights
on the Inventory of the Company.
Procedures Performed:
Observed the clients inventory count procedures.
Obtained 80 samples from the selling area and 40 samples from storage area for
test count, and 25 samples for price test (only pertaining to selling area samples).
Inquired about any findings noted during inventory count observation.
Reconciled any difference or discrepancy noted, if any.
Obtained cut-off documents pertaining to inventory inwards and outwards.
Observations on the Procedures Performed and Reconciliation Made
During the attendance of the inventory count and reconciliation procedures, we observed
the following procedures performed and the reconciliations made:
1. Count briefing was already conducted within the day before SGV representatives
arrived in the store.
2. Store counts were conducted after the operating hours. The SGV representatives
arrived one hour before the communicated start of count which is 10:00 pm.
3. Most of the counters/scanners were involved in the past counts and are already
familiar with the count procedures. Thus, the organizers did not have any difficulty

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Inventory Stocktake Memorandum
Page 2

4.

5.

6.

7.
8.
9.

in conveying instructions. Most of them are representatives from other stores of

Robinsons such as Bulacan, Las Pinas, Antipolo, etc. There were already preassigned numbers of fixture for each team of counter. However, it was noted that
most of the staffs are responsible for counting and scanning at the same time
without accompany of checker. There was a representative from Head Office to
supervise the performance of the count.
Items were scanned on a scan all basis wherein, the Portable Data Terminals
(PDTs) will scan all items and only the system will add items with the same Stock
Keeping Unit (SKU). There are separate encoders assigned to upload the results of
counts in their system through PDTs.
We were not able to have a copy of the inventory listing in the selling area, hence
we were not able to obtain samples from list to floor. However, we extended
samples of floor to list to substantiate our procedures. In the storage area, since
they have their inventory listing, we are able to obtain samples from floor to list.
Goods in the selling area include outright and some concessionaire items. Before the
audit count, outright and concessionaire items were properly determined to avoid
mistake in choosing samples which should include only outright items. The store
manager pointed to the SGV representatives those concessionaire items and
observed that they contain information about the distributor. The prices of products
were also determined and it was noted that prices are ranging from 88 to 388 pesos.
To facilitate a proper count, fixture number tags were placed in each fixture. Each
tag had corresponding fixture number. Counting is made from left to right and top to
bottom. High-value items were also considered for samples in the selling area.
Damaged and obsolete items were properly segregated from good items. Such
items were not included in the count.
Aside from Inventory Test Count, Inventory Price Test was also performed.

Issues Listed:
Issues and Observation

Responses/Comments

Recommendation

Counts were done without

the presence of checker/s.
The staff in their assigned
number of fixtures was
responsible for counting
and scanning at the same
time. This may lead to
inaccuracy of number of
inventories per count
reported.
No inventory listings were
provided or available for
the selling area prior to
inventory count.

SGV representatives were not

able to inquire about this
issue/observation.

The company should ensure

that the count done by
counters/scanners is
properly checked by the
responsible personnel
(checker).

We have extended our sample

for floor-to-list testing.

Inventory listings were

provided for the storage
area but there were items
in the list that are

Items with difference per

record were recounted
together with the assigned
counter and Store Manager to

The company should be

informed that it is essential
in the audit to obtain
inventory listing (with
information about quantity)
prior to our observation. This
issue should be raised to
higher position in order for
the company personnel to
provide us the documents
we need.
There should have a counter
and another person
designated for recording,
afterwards, checker will

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Robinsons, Inc.
Inventory Stocktake Memorandum
Page 3

overstated or understated.

revalidate the difference. The

inventory listing is updated
after the recount.

ensure that quantities

counted matched with
amount recorded.

Some detail for inventories

(such as to location) did
not match per inventory
listing.

The details were updated after

the count.

For price testing

procedure, we noted
variances between the
price in the system and
price per tag.

Per inquiry with the Store

Manager, the difference per
price tag and price per system
relates to sale promo where
markdowns were not reflected
in the price tag.

There should have a counter

and another person
designated for recording,
afterwards, checker will
ensure details recorded are
correct.
Management makes sure to
instruct and supervise the
personnel in-charge for
every shelves to update the
price tag, whenever there
will be a promo/markdown
for a certain items.

Conclusion:

Prepared by:

Kristine Joy M. Labador

Associate

Reviewed by:
Senior Associate

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