PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal

Audit
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit 1
 PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

FORMATION AUDIT TEAM

S/N NAME DESIGNATION

1 Mr. Shekh Mannan DGM, Accounts & Operation

Mr. S.M. Mosabbirul
2 Manager, Internal Audit
Islam
3 Mr. Omar Faruque Manager, Accounts

4 Md. Murshed Arif Mahin Senior Executive, Internal Audit

Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal

Audit
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit 2
 PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

FINISHED GOODS (BRICKS & CHIPS)

No of Stock Value of Stock
Stock Balance as Balance as per Balance as per
Value
S/N Brick Items per register (01 Physical Physical Counting Difference
Differed
Oct 16) Counting (01 (01 Oct 16) @
Oct 16) 5.95 tk.
1 Grade-A 191,817 191,817 1,141,311 - -
2 G-1 Red 24,293 33,704 200,539 9,411 55,995
3 Grade-B 275,230 238,018 1,416,207 (37,212) (221,411)
4 Picket 160,511 160,511 955,040 - -
5 Broken 39,655 38,310 227,945 (1,345) (8,003)
6 Super 5,810 6,264 37,271 454 2,701
Finished Goods
7 - 68,200 405,790 68,200 405,790
found in Klin
8 Chips (Cft) 8,554 11,300 67,235 2,746 16,339

Total 705,870 748,124 4,451,338 42,254 251,411

Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal

Audit
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit 3
 PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

WORK IN PROGRESS (BRICKS & CHIPS)

Value of Stock
Stock Balance No of Stock Balance Balance as per
Value
SL No. Brick Items as per register as per Physical Physical Counting Difference
Differed
(01 Oct 16) Counting (01 Oct 16) (01 Oct 16) @ 5.89
tk.
- -
1 Kaca Brick 186,200
186,200 1,096,718

3 Sun Dry
14,988 14,988 88,279
- -
4 Drier 184,800
184,800 1,088,472
- -
5 Troli
5,600 5,600 32,984

Total 391,588 - -
391,588 2,306,453

Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal

Audit
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit 4
 PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

Calculation of Clay

S/N Particulars Length Width Depth Volume

1 Road 500 21 9.5
99,750
2 West Side 94.5 82 9.5
73,616
3 Middle 85 92 7
54,740
4 East 207.5 155 7
225,138
5 High portion west 268.5 152 15
612,180
6 High portion east 290 161.5 21
983,535
Shed 100 60 17.5
7 105,000

2,153,958
Less: Clay receive from Shipon Enterprise
108,042
Less: Clay receive from Bondhu Enterprise
127,731
Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal
Audit
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit 235,773 5
Total Stock Clay 1,918,185
 PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

PARTICULARS AMOUNT (BDT) AMOUNT (BDT)

As per Physical Counting

Inventory value
Brick (Finished Goods) 4,451,338

Brick (Work in progress) 2,306,453

6,757,791

Clay (Finished Goods) 17,321,211

24,218,076

As per Balance Sheet

Inventory value 22,143,134

Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal

Audit
Value understated in Balance Sheet
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit 1935868 6
 PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

FINDINGS

Value of inventory is understated by 1,935,868 tk. In Balance Sheet due

to not recognizing the value of Work in Progress.

Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal

Audit
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit 7
 PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

IMPACT OF FINDINGS

FINANCIAL IMPACT OPERATIONAL IMPACT

Understatement of inventory value

As value of inventory is understated that
represents ineffective inventory
means total value of asset is understated.
management.
Inventory might be lost or stolen causing
Cost of Goods Sold is also understated.
revenue lost.

Profit is overstated.

Company has been giving more tax.

Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal

Audit 8
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit
PHYSICAL INVENTORY VERIFICATION OF UNIQUE CERAMICS

RECOMMENDATION

Regular and proper inventory valuation need to be

conducted

Inventory value need to be restated

Prepared by: Md. Murshed Arif Mahin Sr. Executive, Internal

Audit
Reviewed By: S.M Mosabbirul Islam, Manager, Internal Audit 9