Auditribe, Agbara, Sango Otta (2026)

28/08/2026

HOW TO AUDIT SLOW MOVING AND OBSOLETE INVENTORY

An inventory balance can look perfectly fine on paper.

The quantity agrees.
The stock exists.
The records are complete.

But there is one important question, Can the organisation still use or sell it?

Because 10,000 units sitting in a warehouse do not necessarily mean 10,000 units of valuable inventory.

Some may be
• Slow moving
• Damaged
• Expired
• Obsolete
• No longer required
• Technically unusable

That is why auditors should look beyond quantity.

I. START WITH THE AGEING REPORT
Obtain the inventory ageing report.

Identify items that have remained unused for long periods.

Look for
🚩 Items with no movement for 6 months
🚩 Items with no movement for 12 months
🚩 Large quantities with very low usage
🚩 Items purchased long ago but still largely untouched

The exact ageing threshold should follow the organisation's policy and the nature of the inventory.

II. COMPARE STOCK WITH ACTUAL USAGE
Don't just look at the quantity.

Compare
Quantity on Hand with Historical Consumption

Ask
How quickly is this item actually being used or sold?

An item with 5,000 units in stock but monthly consumption of only 50 units deserves attention.

III. PHYSICALLY INSPECT THE STOCK
Visit the warehouse where practical.

Look at the condition of selected items.

Check for
• Dust accumulation
• Rust
• Physical damage
• Expired dates
• Broken packaging
• Outdated specifications
• Items stored in poor conditions

Sometimes physical inspection tells a different story from the inventory report.

IV. ASK WHY THE STOCK IS NOT MOVING
This is where the audit becomes more valuable.

Ask management
Why has this item not moved?

Possible reasons include
• Overstocking
• Poor demand forecasting
• Change in production requirements
• Change in product specifications
• Procurement error
• Project cancellation
• Equipment replacement
• Expiry

The reason matters because the solution depends on the cause.

V. CHECK WHETHER THE STOCK IS STILL USABLE
An item can exist physically but have little or no economic value.

Check whether it
• Is still required
• Meets current specifications
• Can still be used
• Can still be sold
• Has an alternative use
• Requires expensive repair before use

This is where the auditor moves from “Does it exist?”

to “Is it still valuable?”

VI. REVIEW MANAGEMENT'S PROVISION OR WRITE DOWN
Where inventory is damaged, obsolete, or unlikely to be sold or used at its recorded amount, assess whether the accounting treatment is appropriate under the applicable accounting framework and company policy.

Ask
• Has management identified the item?
• Has its condition been assessed?
• Has an appropriate write down or provision been considered?
• Is the basis documented?

Do not assume that physical existence means full carrying value.

VII. CHECK FOR REPEATED OVERSTOCKING
Now look at the bigger picture.
Are the same types of items repeatedly becoming obsolete?
If yes, the problem may not be the warehouse.

It may be, Poor forecasting
or
Weak procurement planning.

This could lead to a broader control finding.

RED FLAGS FOR AUDITORS

Watch for
Large quantities with no movement
Expired or damaged items
Repeated emergency purchases while old stock remains unused
Significant stock purchased shortly before becoming obsolete
Management unable to explain why items are not moving
No periodic inventory ageing review
Old inventory carried at full value without assessment
Repeated write offs of similar items

When reviewing inventory, don't ask only “Is the stock there?”

Also ask “Can the organisation still derive value from it?”

Because inventory can be Physically present

but Economically useless.

That is a risk auditors should not overlook.

28/08/2026

DAY 57 OF 100 AUDIT LESSONS

Your Working Paper Should Tell the Story of Your Audit

Let me ask you a question.

If someone picked up your audit working paper six months after you completed the audit, would they understand what you did, what you found, and how you reached your conclusion?

If the answer is no, there is a problem.

A working paper is not just a place to store screenshots, documents, Excel files and tick marks.

It should tell the story of your audit.

Someone reviewing your work should be able to follow your thinking without having to call you and ask:

“What exactly did you do here?”

A good working paper should answer five basic questions:

1. What were you trying to test?

Clearly state the audit objective.

For example:

“To determine whether purchases were properly authorised in accordance with the approved procurement policy.”

2. What did you test?

State your population, period, sample and selection approach.

Do not simply write:

“Sample tested: 20.”

Explain what those 20 transactions represent.

3. What evidence did you examine?

Was it purchase orders?

Invoices?

Goods received notes?

Approval records?

System reports?

Bank statements?

Physical inspection?

Make it clear.

4. What did you find?

Your working paper should clearly show the exceptions identified, if any.

Do not make the reviewer search through 15 pages to discover one missing approval.

5. How did you reach your conclusion?

This is one of the most important parts.

Your conclusion should logically flow from your testing and evidence.

Think of your working paper like a story.

It should move from:

Objective → Risk → Procedure → Evidence → Result → Conclusion

If there is a gap between these steps, the reviewer may question the quality of your audit work.

For example:

You identify the risk of unauthorised purchases.

Your audit procedure is to test whether selected purchases received approval before the purchase order was raised.

You select 30 transactions.

You examine the purchase orders and approval records.

You identify three transactions without evidence of approval.

You document the three exceptions.

Then your conclusion explains what the testing indicates and, where appropriate, what further work is required.

That is a working paper that tells a story.

Here is another important lesson.

Do not rely on your memory.

You may understand exactly what you did today.

But three months later, you may not remember why you selected a particular sample, why you performed an additional test or why you accepted a particular piece of evidence.

Document the important judgement behind your work.

Because your working paper may eventually be reviewed by:

Your Audit Manager

Head of Internal Audit

External auditors

Regulators

The Audit Committee

Investigators

Your working paper should allow another competent auditor to understand the work without relying on your verbal explanation.

Ask yourself before you sign off your working paper:

“If I were not available tomorrow, could another auditor understand exactly what I did?”

If the answer is no, improve the documentation.

Good audit work that is poorly documented can be difficult to defend.

DAY 57 TAKEAWAY

Your working paper is the evidence of the work you performed. Make sure it can tell the story without you being in the room.

Do not document just enough to satisfy your checklist.

Document enough to demonstrate your thinking, evidence, judgement and conclusion.

Because when someone asks:

“How did you arrive at this conclusion?”

Your working paper should be able to answer before you say a word.

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28/08/2026

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See comment section to get your copy 👇

27/08/2026

Before you sleep this night, remember our Lesson 56 today.

Do not confuse a process with a control.

A process tells you how work is done.

A control should help prevent, detect or correct a risk.

So when you see a signature, do not immediately say:

“The control is working.”

Ask:

What is this signature supposed to achieve?

Is the person actually reviewing what they are approving?

Does the control address the risk?

Is it operating consistently?

Remember:

A document is not automatically a control.
A signature is not automatically a control.
A procedure is not automatically a control.

Do not just audit whether the control exists.

Audit whether it works.

Sleep well, Auditor.

Tomorrow, we continue with Lesson 57 of 100.

27/08/2026

IF YOU DON'T HAVE A MIND OF YOUR OWN AS AN AUDITOR, PEOPLE WILL WHINE YOU....

Haha, I am joking… but honestly, think about it for a moment.

One of the most important things you need to develop as an auditor is the ability to think for yourself.

Not everything an auditee tells you is the final answer.

Not everything your manager suggests is automatically the conclusion.

Not everything you see in a previous audit report should be copied into your current audit.

And definitely, not everything that sounds convincing is actually correct.

Because if you do not have a mind of your own as an auditor, people can easily convince you to see things from their perspective.

And before you know it, you have gone from being the auditor asking questions to becoming the person defending the process you were supposed to examine.

Let me give you a simple example.

You are reviewing a procurement process and you discover that several purchases were made without the required competitive quotations.

You ask the process owner:

“Why was the required quotation process not followed?”

And they tell you:

“Ah, this supplier has been working with us for years. They are reliable. We needed the materials urgently. Besides, management knows about it.”

Now, you have two choices.

You can say:

“Okay, that makes sense.”

And move on.

Or you can pause and ask:

“Was the emergency properly documented?”

“Was the required approval obtained?”

“Was the exception allowed under the procurement policy?”

“Was the supplier selection independently reviewed?”

“Is there evidence that the price was reasonable?”

That is where professional judgment comes in.

Your job is not to argue with people.

Your job is to understand what happened, obtain evidence, assess the risk and reach an independent conclusion.

Sometimes an auditee will genuinely explain something that changes your understanding of the issue.

That is good.

An auditor should never be so proud that they refuse to change their conclusion when the evidence proves them wrong.

But there is a big difference between changing your conclusion because of evidence and changing your conclusion because someone pressured you.

That difference matters.

Because auditing requires courage.

There will be times when the process owner is more experienced than you.

There will be times when they have worked in the organization longer than you.

There will be times when they are very confident about their explanation.

There may even be times when everyone around you seems to agree with them.

You still have to ask yourself:

“What does the evidence say?”

Not:

“What will make everyone happy?”

Not:

“What will make this audit easier?”

Not:

“What conclusion does the auditee want me to reach?”

And not:

“What did the previous auditor write?”

What does the evidence say?

That should guide you.

Another thing I have learned is that you should never be afraid to say:

“I do not understand.”

That statement has saved many auditors from making wrong conclusions.

If you do not understand a process, ask.

If you do not understand a transaction, ask.

If the explanation does not make sense, ask again.

If the document does not support what you have been told, investigate further.

You are not expected to know everything.

But you are expected to think critically.

A good auditor listens.

A good auditor observes.

A good auditor asks questions.

But a great auditor does something more…

They form their own conclusion based on sufficient and reliable evidence.

So yes, my people, have a mind of your own.

Be respectful.

Be open-minded.

Be willing to learn.

Be willing to change your position when the facts change.

But do not allow anyone to think for you.

Because the moment you stop thinking independently, you are no longer really auditing.

You are simply accepting explanations.

And an auditor who accepts everything without questioning anything can easily miss the very thing they were assigned to find.

Your independence is not just about the position you hold.

It is also about the way you think.

So the next time someone gives you a very convincing explanation during an audit, do not immediately say, “Okay.”

Smile.

Listen.

Take note.

Then quietly ask yourself:

“What evidence supports this?”

That little question can completely change the quality of your audit.

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27/08/2026

THE AUDITOR'S “WHY?” TEST

Auditors are trained to ask What happened?

But sometimes, the better question is WHY?

Imagine you find this during an audit. Inventory variance: 500 units

The first question is What happened?

But don't stop there.

Ask, WHY was there a variance?

“Because the stock records were inaccurate.”

Then ask again WHY were the records inaccurate?

“Because stock movements were not updated promptly.”

Again WHY were stock movements not updated?

“Because one warehouse officer was responsible for receiving, issuing, and updating the records.”

Now we are getting closer to the real problem.

The issue may not simply be Inventory variance.

The deeper issue may be, Weak segregation of duties and inadequate control over stock records.

When you identify a problem, keep asking WHY DID IT HAPPEN?

Until you understand
• The real cause
• The control weakness
• The people or process involved
• Why the issue was allowed to continue
Because this matters.

A weak recommendation says “Management should investigate the variance.”

A stronger recommendation addresses the reason the variance occurred.

Don't just report what happened.
Understand why it happened.

Because WHAT HAPPENED gives you the finding.

But WHY IT HAPPENED helps you fix the problem.

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27/08/2026

THERE ARE FEW THINGS I BELIEVE EVERY AUDITOR SHOULD UNDERSTAND ABOUT THE PROFESSION

And I know not everyone will agree with me.

That is okay.

Because some of these things need to be said.

1. Audit is one of the most important functions in an organisation.

I know some people still see auditors as the people who come around asking for documents, checking transactions and pointing out mistakes.

But audit is much bigger than that.

A good audit can identify a risk before it becomes a loss.

It can expose a control weakness before someone exploits it.

It can help management see what they may have become too familiar with to notice.

And sometimes, an auditor is the person asking the uncomfortable question that nobody else wants to ask.

That is important work.

2. Auditors should be valued for the impact they create, not just the number of reports they produce.

An auditor can complete ten audit reports and still add less value than another auditor who identifies one serious risk that saves the organisation from a major loss.

We need to stop measuring audit only by how many assignments were completed.

Ask instead:

Did we identify meaningful risks?

Did management understand them?

Did our recommendations improve the process?

Did we prevent something from going wrong?

Did we help the organisation make better decisions?

That is where the real value is.

3. Audit should never be treated as a side function.

When audit is properly positioned, it becomes part of the organisation's decision-making and risk management conversation.

Not because auditors should run the business.

They should not.

But because auditors see things from a different angle.

We look at processes.

We look at controls.

We look at risks.

We look at exceptions.

We connect things that may appear unrelated.

That perspective is valuable.

4. You cannot build a strong control environment without giving audit the room to do its job.

Imagine asking an auditor to identify control weaknesses but becoming angry whenever a weakness is reported.

Imagine asking for an independent audit but expecting the auditor to ignore certain issues because they involve senior people.

Imagine having an audit department but allowing management to override every recommendation they disagree with.

That is not a strong control environment.

Audit independence is not about giving auditors power over management.

It is about giving auditors enough freedom to tell the truth without fear.

5. Underestimating an auditor can become an expensive mistake.

Sometimes, the auditor who keeps asking questions may look annoying.

The auditor who keeps requesting evidence may look difficult.

The auditor who refuses to accept "that is how we have always done it" may appear stubborn.

But one day, that same question you ignored may become a fraud investigation.

That same missing document may become a financial loss.

That same control weakness may become a major finding.

That same exception everyone considered insignificant may eventually become a serious problem.

This is why professional skepticism matters.

6. Being a good auditor can completely transform your career.

Audit teaches you something very powerful.

You learn how businesses actually work.

You learn how money moves.

You learn how decisions are made.

You learn where processes break down.

You learn how people behave when controls are weak.

You learn how to communicate difficult information.

You learn how to investigate problems.

You learn how to ask better questions.

Those skills can take you far beyond audit.

But you have to take the profession seriously first.

7. The best auditors should not be managed through fear.

An auditor should be able to say:

"I do not agree with this."

"Please show me the evidence."

"Why was this exception approved?"

"What happens if this control fails?"

"Who is responsible for this process?"

"What prevents this from happening again?"

Without worrying that asking these questions will make them unpopular.

Audit is not a popularity contest.

You are not there to make everyone happy.

You are there to provide an objective view of what is happening and help the organisation understand its risks.

8. The best auditors do not just find problems. They understand problems.

There is a huge difference between saying:

"Management did not comply with the procedure."

And saying:

"This procedure is not being followed because the current approval process creates a delay of several days, causing employees to bypass the control."

The first identifies a problem.

The second begins to understand the problem.

That is the kind of auditor organisations need.

9. A great auditor does not just bring experience. They bring curiosity.

You may have audited procurement for five years.

That does not mean the procurement process in your new organisation works the same way.

You may have investigated fraud in another company.

That does not mean the same fraud risk exists in the same way here.

Every organisation has different people.

Different systems.

Different processes.

Different cultures.

Different risks.

Your experience should help you ask better questions.

It should never make you stop asking questions.

10. Auditors deserve to be appreciated, but we also have to earn that appreciation.

Do not demand respect simply because your job title says "Auditor."

Earn it through your work.

Know the business.

Understand the process.

Prepare properly.

Ask intelligent questions.

Document your work.

Communicate clearly.

Be fair.

Stand your ground when necessary.

Admit when you are wrong.

And most importantly, never compromise your professional judgment simply because speaking the truth is uncomfortable.

Because at the end of the day, the strongest auditor is not the one everyone likes.

It is the one people can trust.

Trust to be fair.

Trust to be objective.

Trust to protect confidential information.

Trust to challenge appropriately.

Trust to tell the truth even when the truth is uncomfortable.

And trust to recommend something that will genuinely make the organisation better.

Audit is not just about finding what went wrong.

It is about helping the organisation become better prepared for what could go wrong next.

And that is a responsibility I believe every auditor should be proud of.

27/08/2026

SAVE THIS CHECKLIST FOR YOUR NEXT AUDIT.

CHECKLIST 007 — AUDIT INTERVIEW CHECKLIST

A poorly conducted audit interview can leave you with a lot of information but very little evidence.

Use this checklist when interviewing a process owner, employee, or management representative.

1. BEFORE THE INTERVIEW

[ ] Do I understand the process I am discussing?

[ ] Have I reviewed the relevant policies and procedures?

[ ] Have I reviewed previous audit findings?

[ ] Have I identified the key risks?

[ ] Have I reviewed the documents and data already available?

[ ] Do I know exactly what I need to confirm from the interview?

2. PREPARE YOUR QUESTIONS

[ ] Have I prepared open-ended questions?

[ ] Have I avoided questions that suggest the answer?

[ ] Have I identified questions around the key controls?

[ ] Have I prepared follow-up questions for possible exceptions?

[ ] Have I prepared questions around unusual transactions or activities?

3. START THE INTERVIEW PROPERLY

[ ] Have I introduced myself and explained my role?

[ ] Have I explained the purpose of the interview?

[ ] Have I explained the audit scope where necessary?

[ ] Have I created an environment where the person can speak openly?

[ ] Have I avoided making the person feel that the interview is an interrogation?

4. UNDERSTAND THE PROCESS

[ ] Can the person explain the process from beginning to end?

[ ] Who initiates the process?

[ ] Who performs each activity?

[ ] Who approves each stage?

[ ] Who reviews the process?

[ ] What happens when something goes wrong?

[ ] What happens when there is an exception?

5. ASK FOR EVIDENCE

Do not stop at:

“Do you perform this control?”

Ask:

[ ] “Can you show me?”

[ ] Is there documentation supporting the explanation?

[ ] Is there a system record?

[ ] Is there an approval trail?

[ ] Is there evidence of review?

[ ] Can I trace the explanation to an actual transaction?

6. PAY ATTENTION TO INCONSISTENCIES

[ ] Does the person's explanation agree with the policy?

[ ] Does the explanation agree with the documents?

[ ] Does the explanation agree with the system records?

[ ] Does the explanation agree with what another employee said?

[ ] Are there statements that require further verification?

[ ] Has the process owner described something that is different from the documented process?

7. WATCH FOR RED FLAGS

[ ] “We normally do it this way.”

[ ] “That person handles everything.”

[ ] “The approval is usually done later.”

[ ] “We do not keep records for that.”

[ ] “It only happens occasionally.”

[ ] “Everyone knows about it.”

[ ] “That is how we have always done it.”

[ ] “I cannot remember why that happened.”

These statements are not automatically evidence of wrongdoing.

But they are reasons to ask more questions.

8. DO NOT ACCEPT EXPLANATIONS TOO QUICKLY

[ ] Have I asked “why?”

[ ] Have I asked “how?”

[ ] Have I asked “when?”

[ ] Have I asked “who?”

[ ] Have I asked “what happens next?”

[ ] Have I asked “what evidence supports this?”

[ ] Have I independently verified important explanations?

9. USE SILENCE

[ ] Have I allowed the person enough time to answer?

[ ] Have I avoided interrupting unnecessarily?

[ ] Have I allowed silence after important questions?

[ ] Have I given the person an opportunity to explain unexpected information?

Sometimes the most useful information comes after the first answer.

10. CLOSE THE INTERVIEW PROPERLY

[ ] Have I summarised the key points discussed?

[ ] Have I confirmed my understanding with the interviewee?

[ ] Have I clarified outstanding questions?

[ ] Have I identified documents that still need to be provided?

[ ] Have I agreed the next steps?

[ ] Have I thanked the person for their time?

11. DOCUMENT THE INTERVIEW

[ ] Date and time recorded

[ ] Names and roles of participants recorded

[ ] Key questions documented

[ ] Important responses documented

[ ] Evidence requested documented

[ ] Exceptions documented

[ ] Contradictions documented

[ ] Follow-up actions documented

12. FINAL QUESTION

[ ] Did I leave the interview with evidence I can verify, or did I simply leave with someone's explanation?

That distinction matters.

An auditor's job is not to catch people out.

It is to understand what is happening, ask the right questions, verify what has been said, and obtain sufficient evidence to support the audit conclusion.

The best auditors do not necessarily ask the most questions.

They ask the questions that make people think.

SAVE THIS CHECKLIST FOR YOUR NEXT AUDIT INTERVIEW.

Auditribe

27/08/2026

DAY 56 OF 100 AUDIT LESSONS

Do Not Confuse a Control With a Process

Here is a mistake I have seen auditors make.

They see that a procedure exists.

They see that someone is performing an activity.

They see a document with a signature.

And they immediately conclude:

“There is a control.”

Not necessarily.

A process describes how work is done.

A control is something designed to prevent, detect, or correct a risk.

That difference is very important.

Let me give you a simple example.

A company has a procurement process.

The process says:

1. User raises a purchase request.

2. Procurement obtains quotations.

3. Purchase order is created.

4. Goods are received.

5. Invoice is processed.

6. Payment is made.

That is a process.

Now ask yourself:

Where are the controls?

Perhaps:

The purchase request must be approved before procurement begins.

The procurement officer must obtain quotations from approved suppliers.

The purchase order must be approved by an authorised person.

The quantity received must be independently checked against the purchase order.

Finance must match the purchase order, goods received note and invoice before payment.

The payment must be independently authorised.

Those are controls.

Why does this matter to an auditor?

Because during an audit, you should not simply ask:

“Is there a process?”

You should ask:

“What risk is this control designed to address?”

For example, a manager signing a purchase order is not automatically a strong control.

Ask:

What is the manager checking before signing?

Are they confirming the purchase is necessary?

Are they checking the price?

Are they confirming the supplier?

Are they checking that the purchase is within budget?

Or are they simply signing because that is what they have always done?

A signature alone does not automatically make something a good control.

This is why control testing should go deeper.

Do not only test whether the control exists.

Test whether it is:

Designed appropriately.

Implemented.

Operating consistently.

Actually addressing the identified risk.

Imagine a company has a policy requiring all payments above ₦5 million to receive approval from the Managing Director.

You test 20 payments and see the Managing Director's signature on all of them.

You might conclude that the approval control is working.

But what if the Managing Director signs every document without reviewing the supporting evidence?

The control may exist on paper.

The evidence of approval may exist.

But the control may not be operating effectively in substance.

Remember this:

A document is not automatically a control.

A signature is not automatically a control.

A procedure is not automatically a control.

You need to understand the risk, the control objective, and how the control actually reduces that risk.

That is when you move from simply checking documents to actually evaluating internal controls.

DAY 56 TAKEAWAY

Do not just ask whether a control exists. Ask whether the control actually addresses the risk it is supposed to address.

As an auditor, your job is not merely to confirm that people followed a process.

Your job is to determine whether the controls within that process are designed and operating effectively.

Do not audit the signature.
Audit what the signature is supposed to achieve.

27/08/2026

This is something every auditor should know.

Not every exception deserves to become an audit finding.

Read that again.

Sometimes you will identify an error that has no significant risk.

Sometimes the process owner has already corrected it.

Sometimes it is genuinely isolated.

Sometimes there is no meaningful impact.

Your job is not to fill your report with findings.

Your job is to communicate the matters that matter.

A strong auditor knows the difference between:

An error.

A control weakness.

A significant risk.

A systemic issue.

And a reportable audit finding.

Professional judgement matters.

The goal is not to make your report look busy.

The goal is to make it useful.
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