Develop expectations for the following:
1 Inventory by cost component (material, labour and overhead), location or category (raw materials, work in progress or finished goods)
2 Average cost of inventory
3 Materials purchase price variances
Compare actuals to expectations.
Investigate variances over xxxx (% of performance materiality, $ amount) from expectations and obtain explanations and corroborative evidence for these variances.
Where there is no appropriate explanation or corroborative evidence supporting the variance, consider the need to plan and undertake additional work and/or document any errors identified.