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taken. Completion of the package by the store was designed to
ensure accuracy and consistency in the count and reconciliation
with book inventory. The package included detailed instructions
for store preparation to ensure an efficient count. The package
included 13 schedules that were reviewed or completed prior to
the day of the count.
Persons involved in a count included a team of independent
counters (18 to 40 individuals) and representatives from
Wal-Mart's loss prevention department (one to two individuals),
internal audit department (one to three individuals), and
operations division (one to two individuals). E&Y was also
present at the inventories of randomly selected stores to test
the count's accuracy by recounting results. All salable
merchandise in a store was counted by the independent counters on
the day of the physical inventory, and they based the count on
the inventory's retail value.
Wal-Mart took inventory while the stores were open to
customers. Each store count took a full day, commencing at
approximately 8 a.m. and concluding at approximately 6 p.m.
Thereafter, while still at the store, the physical count team
reconciled the physical count to the book inventory. These
reconciliations were reviewed by petitioners' internal audit
department on a future date. Due to the time necessary to review
the reconciliations, petitioners did not book the results of a
physical inventory until the next month.
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