The owner of a retail hardware shop has approached you for assistance in designing appropriate control procedures that would help in safe guarding the assets of the business against possible losses through theft and fraud. He is more particularly concerned about loss of cash and stocks. All sales are made across the counter and in cash onlyRequiredFor each of the following assets, suggest ten practical control procedures that the owner of the retail hardware shop should implement to minimise possible losses through theft and fraud: Stocks

Controls over stock

  •  An appropriate inventory system should be put in place. This should be able to capture all stock purchases and up date the stock balances with every sale made. All stock items should be appropriately coded;
  •  All stock purchases should be accompanied by a goods received note that is used by an independent person to update the stock records with the receipts;
  •  All issues of stock from the store to the shop should be authorised by a senior person and the stock movement up dated in the inventory system;
  •  There should be adequate documentation of all stocks returned back to the store or warehouse. The stock records should be updated with such returns.
  •  On a monthly basis a stock count should be conducted. The physical stock counted should be reconciled to the expected stock as per the inventory system;
  •  Closed circuit TV cameras should be installed to deter and detect shop lifting;
  • Unauthorized persons should not be allowed into the shop premises;
  •  Security measures should be put in place to ensure that employees do not carry stolen items when leaving the premises; e.g. inspection locks etc.
  •  Stocks write offs should be authorised by a senior responsible official

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