Annual Audit Job Item List

(Trading + Inventory + Payroll)

Private page (top-level). Use this as your annual audit PBC/job checklist for a trading company with inventory and payroll.

A) Kickoff & scope (Week 0)

Confirm audit period (FY dates) and reporting basis (local GAAP/IFRS)

Share prior-year audited FS + prior management letter (if any)

Provide org chart + finance team responsibilities (AR/AP/Inventory/Payroll)

Provide closing timetable and agreed PBC deadline schedule

Provide accounting policies (revenue, inventory valuation, FX, fixed assets, leases)

B) Close & master schedules (Month 12 close)

Core books

Final Trial Balance (TB) for the year

Full General Ledger (GL) detail (all accounts)

Chart of Accounts (COA)

Journal entry listing (manual + system-generated) with approvals/support

Month-end close checklist + evidence (reconciliations sign-offs)

Financial statements package

Draft FS: Balance Sheet, P&L, Cash Flow, Equity Changes

Notes to FS draft (disclosures)

Analytics pack: monthly P&L by department/product + key variances vs prior year

C) Trading-specific (Revenue / AR / COGS)

Sales / Revenue

Customer master data + top customer list

Sales invoice listing for the year

Revenue recognition policy (delivery terms: FOB/CIF etc.)

Sample sales documents (per auditor request):

Sales order / contract / PO

Delivery order / proof of delivery

Invoice + tax invoice (if applicable)

Credit notes / returns support

Cut-off support: sales around year-end (e.g., last 10 days + first 10 days next year)

Accounts Receivable

AR aging at year-end

AR reconciliation to GL

Subsequent receipts evidence (bank statements after year-end)

Bad debt provision calculation + basis (historical loss rate / specific assessment)

Customer confirmations (auditor will send; you provide contact list + balances)

D) Inventory (high focus for trading)

Inventory listing & valuation

Year-end inventory listing by SKU/location with quantities + unit costs

Inventory valuation method (FIFO/weighted average) documentation

Cost build-up support for unit costs (purchase invoices, landed cost allocation)

Slow-moving/obsolete analysis + write-down calculation

Inventory reconciliation:

Inventory sub-ledger to GL

Stock movement summary (opening + purchases + sales/issue + adjustments = closing)

Stock count (physical inventory)

Stock count plan (date/time, locations, teams, controls)

Pre-numbered count sheets / count tags

Cut-off procedures for receiving/shipping during count

Count results + variances and adjustment approvals

Evidence for auditor observation (photos, sign-off sheets, recount logs)

Purchases / AP link to inventory

GRN (goods received notes) listing around year-end

Purchases cut-off testing: receiving invoices after year-end for goods received before year-end

E) Procure-to-Pay (AP / Expenses)

Vendor master data + top vendor list

AP aging at year-end

AP reconciliation to GL

Unrecorded liabilities support:

Subsequent payments listing (after year-end)

Open PO report + GRNI schedule

Key vendor statement reconciliations (selected vendors)

Expense samples with:

PO/approval

Invoice

Proof of receipt/service completion

Payment evidence

F) Cash / Banking / Treasury

Bank statements for all accounts (year-end + subsequent month)

Monthly bank reconciliations + year-end reconciliation

Bank confirmations (auditor request)

List of authorized signatories + approval matrix

FX revaluation calculation (if multi-currency)

Petty cash count sheet + reconciliation (if used)

G) Payroll (annual audit + compliance)

Payroll processing

Payroll register for the year + monthly summaries

Payroll reconciliation to GL (gross pay, deductions, net pay)

Employee master list (joiners/leavers) + contracts

Salary changes approvals, bonus approvals, allowance policies

Timesheets/attendance basis (if applicable)

Statutory & tax

Payroll tax filings and proofs of payment

Social security/benefits filings and proofs of payment

Accruals:

Bonus accrual calculation

Leave/THR accrual calculation and policy (if applicable)

H) Fixed assets

Fixed asset register (FAR) + depreciation schedule

Additions support (invoice, capitalization memo)

Disposals support (sale docs, write-off approvals)

Physical verification list (sample) + asset tagging policy

I) Tax (trading company essentials)

VAT/output-input summary (if applicable)

Withholding tax schedules (if applicable)

Annual corporate income tax working (book-to-tax reconciliation)

Tax assessments, disputes, correspondence (if any)

J) Other key areas

Related parties list + transactions summary + supporting agreements

Loans/financing agreements + interest schedules + covenant calculations

Legal matters summary + lawyer confirmation (if needed)

Insurance policies (inventory/warehouse, assets, liability)

K) Audit completion

Management responses to audit findings

Proposed audit adjustments (AJE list) review + approvals

Final FS + final notes

Management Representation Letter (sign)

Management letter action plan (owners + due dates)

Trading + inventory + payroll: “Top 10” items auditors usually push hardest

Stock count controls + variances

Inventory valuation (landed costs, write-downs)

Sales cut-off at year-end

GRNI / unrecorded liabilities

AR confirmations + bad debt provision

Bank recs and confirmations

Manual journal entry support/approvals

Payroll reconciliation + statutory payments

Related party transactions

TB-to-FS mapping + disclosures completeness