THREATS TO INVENTORY WITHIN THE PRODUCTION CYCLE (BOTH THREATS TO
PHYSICAL INVENTORY AND THE DATA RELATED TO INVENTORY)
THREATS
SPECIFIC CONTROLS
Review of product design costs as well
Poor Product Design
as assessment of warranty and repair
costs
Thorough analysis of historical data to
have an accurate production planning
Over- or Under-production
Appropriate approval of production
schedule and orders as well as the
restriction of access to these
Appropriate Approval of acquisitions of
fixed assets
Suboptimal investment in fixed assets
Budgetary Control
Request for proposals to solicit
competitive bids
Assign personnel and restrict physical
access to work in process, finished
goods, and fixed assets
Tracking all movements of inventory
movements
Segregation of duties from recording
Theft of Inventories and fixed assets
up to authorization
Regular physical counting of inventory
plus reconciliation of these to quantity
records
Documentation and review of all
transactions involving disposal of fixed
assets as well as sufficient insurance
Always ready a back-up power supply
to avoid idle operations
Disruption of Operations
Crisis preparedness and disaster
recovery plans
Assessment of preparedness
Take advantage of the RFID and barcode technology
Inaccurate Cost Data
Regular verification and matching of
records with physical count
Crisis preparedness, back up files,
disaster recovery plans
Loss, Alteration or Unauthorized
Logical, data transmission, and
disclosure of data
physical access controls
Configuration of Enterprise resource
planning systems
Provide necessary trainings
Utilize incentives and request for a
Poor Performance
regular performance report to track
progress