| ID: 5.003 |
| Test field: 05 – Inventory |
| Name: Low-value test |
| Description: The objective of the audit is to ensure compliance with the strict low-value test in the valuation of inventories (§ 253 paras. 1 and 4 HGB), insofar as raw materials, consumables and supplies as well as merchandise (§266 B.I.1 and B.I.3 HGB) are concerned. This allows the overvaluation of old inventories to be identified. Materiality limit (in EUR): An amount must be stated that is to exceed the difference between the valuation price and the moving average. The limit can be adjusted again in the report. Materiality limit percentage: A percentage value is to be specified that is to exceed the percentage deviation of the valuation price from the moving average price. The limit can be adjusted again in the report. |
| Combination with audit procedures: The data-based execution of the impairment test represents a dual purpose test that can be used as a functional test for inventory valuation. In addition, direct conclusions can be drawn for the inventory itself and any potential for write-downs can be identified. The statistical data provided as standard enables analytical audit procedures to be carried out easily with reference to the inventory being examined. |
| Savings potential main audit: By performing this audit action during the year, no further audit actions will be necessary during the main audit to ensure compliance with the lowest value principle. In combination with the slow-mover analysis, a comprehensive to final audit of the subsequent valuation is possible. |
| Additional explanation: For manufacturing companies, inventories are regularly a significant balance sheet item that has to be examined due to its size and risk structure. In addition, there are almost always significant contributions to earnings from the devaluation of inventories and merchandise. Anticipating these influences already during the year – both on the part of the company and the auditor – represents a central added value of oktant for all parties involved. |
