Internal Audit for a Large Retail & Consumer Goods Group

Client Overview

A diversified retail group operating multiple high-volume product categories across Al Ain, supported by an integrated warehouse and a full retail ERP environment. The business offers an extensive range of products, including electronics, fashion, footwear, groceries, fresh food, perfumes, household goods, toys, textiles, and gift items, serving a large daily customer base with ample parking and high store traffic. The operation runs on iTrade POS and Retail ERP, managing thousands of SKUs across several retail divisions with complex stock movements between warehouse and outlets.

Challenges

The client was facing growing operational and financial uncertainty due to long-standing issues in their inventory and warehouse management processes. Over several years, discrepancies accumulated silently in their retail ERP system, causing:

Unreliable stock data that made daily decision-making difficult.

Inconsistent barcode usage, leading to incorrect costing and mismatched SKUs.

Unstructured warehouse-to-shop transfers, resulting in undocumented movements and untraceable variances.

Lack of periodic reconciliation, causing inaccuracies to accumulate undetected.

High staff turnover and weak documentation discipline, further weakening internal controls.

Management concerns around shrinkage, valuation accuracy, and the reliability of financial reporting.

The retailer needed an independent, systematic internal audit to restore accuracy, rebuild trust in the numbers, and establish sustainable operational governance.

Solution

Swift Audit & Advisory delivered a comprehensive internal audit engagement focused on inventory integrity, operational controls, and process improvement. Swift’s process included:

Diagnostic Review of iTrade POS & ERP

Examined configuration settings, stock movement logs, and costing methodology.
Analyzed historical transactions to identify behavioural patterns and recurring errors.

End-to-End Mapping of Inventory Workflows

Reviewed receiving, issuing, inter-branch transfers, and adjustments.
Conducted walkthroughs with warehouse and retail personnel to understand actual practices versus system expectations.

Data Analytics & Reconciliation

Reconciled system balances with supplier records, physical counts, and internal documents.
Identified categories with the highest inaccuracies and root causes.

Physical Verification & Sample Testing

Executed targeted counts across high-risk categories.
Validated barcode integrity and SKU mapping.

Supplier Returns, Pricing & Costing Review

Assessed governance over supplier returns, credit notes, and GRNs.
Evaluated costing variability caused by inconsistent item creation and barcode duplication.

Action Plan & Control Framework

Delivered a clear, prioritised management action plan covering:

Inventory cycle procedures
Barcode & SKU creation rules
Transfer documentation standards
User access controls
Periodic reconciliation processes
Staff training and segregation of duties

Outcomes

The internal audit provided management with clarity for the first time in years and enabled a full operational reset. Key results included:

Restored inventory accuracy across retail and warehouse operations.
Elimination of valuation distortions through corrected costing methods and system adjustments.
Reliable, timely stock information, enabling informed purchasing and pricing decisions.
Reduced shrinkage and undocumented losses through structured transfer controls.
Improved operational discipline thanks to clear procedures and enhanced documentation.
Stronger internal control environment, giving management renewed confidence in financial reporting.
A sustainable governance structure that supports future growth and potential expansion of retail lines.

Added Value

Beyond resolving discrepancies, Swift helped the retailer understand systemic issues across the business, and delivered additional benefits including:

Improved alignment between the warehouse, procurement, and retail outlets.
Better category-level insights enabling margin optimisation.
Staff capability uplift through training and clarified responsibilities.
A scalable control framework ready for expansion into new retail categories or additional branches.

“Our goal was not just to fix the numbers, but to rebuild a reliable system the management can trust every single day. The audit helped them regain control of their operations and make decisions based on accurate, transparent information.”

- Arnulfo Relampagos, Assurance & Operations Manager

Author: Swift team, Swift Audit & Advisory

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