Inventory Auditing & Data Accuracy Flashcards
7 cards from real CIM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Inventory Auditing & Data Accuracy flashcards as text
Which of the following is NOT a common cause of inventory record inaccuracy?
Answer: Employees following standard operating procedures
Following SOPs is a control that prevents errors; unrecorded shrinkage, receiving keying mistakes, and timing delays are all root causes of inaccuracy.
A 'tag control' system during a physical inventory ensures that:
Answer: Every count tag is accounted for to prevent missed or double-counted locations
Tag control tracks the serialized count tags issued and returned so auditors can verify no locations were skipped or counted twice.
What is the purpose of 'cutoff control' procedures during a physical inventory?
Answer: To freeze or carefully track transactions during the count so receipts and shipments don't distort count results
Cutoff control ensures that inventory movements occurring during the count period are properly segregated so the count reflects a consistent point-in-time snapshot.
An RFID-based inventory system provides an advantage over traditional barcode scanning for audits primarily because:
Answer: RFID can read multiple tags simultaneously without line-of-sight
RFID readers can capture hundreds of tags per second without requiring direct line-of-sight, dramatically speeding up large-area inventory verification.
When calculating inventory accuracy at the location level rather than the SKU level, which additional error type becomes visible?
Answer: Misput and bin-level allocation errors
Location-level accuracy reveals misput errors where correct quantities exist in the wrong bin — these are invisible when accuracy is only measured at the SKU total level.
A warehouse manager notices that inventory accuracy drops significantly after every holiday season peak. The most likely root cause is:
Answer: Increased use of temporary workers unfamiliar with receiving and putaway procedures
Temporary workers hired for peak season typically lack training in WMS transaction procedures, leading to receiving keying errors and incorrect putaway scans.
In auditing inventory valuation accuracy, the FIFO (First-In, First-Out) costing method ensures that:
Answer: Oldest inventory costs are recognized in cost of goods sold first
Under FIFO, the cost of the earliest purchased units flows to COGS first, leaving newer (often higher) costs in ending inventory.