What is the primary function of inventory audits?

The primary function of inventory audits is to verify inventory levels and ensure accuracy. This process involves systematically examining and counting physical stock to confirm that the records reflect the actual inventory on hand. These audits are essential for maintaining accurate stock records, which is critical for effective supply chain management.

Accurate inventory levels enable better decision-making regarding purchasing, production, and sales. By conducting regular audits, organizations can identify discrepancies, prevent inventory shrinkage due to losses or errors, and ensure that they have the necessary materials available for operational needs. This contributes to overall efficiency in the supply chain and helps organizations meet customer demand effectively.

In contrast, enhancing employee productivity, increasing marketing effectiveness, and reducing supplier costs are important aspects of business operations, but they fall outside the primary scope of what inventory audits aim to achieve. While efficient inventory management can indirectly support these areas, it is the verification of inventory accuracy that lies at the core of the audit's purpose.