Field Exam

Asset Integrity

Inventory ages over time and might lose its value due to environmental damage or simple obsolescence while it sits on the warehouse shelves. During a field exam, auditors pull sample invoices and conduct physical counts to verify that the accounts receivable actually represent collectible cash from real customers.

Systemic Testing

Reviews extend beyond the count of boxes to look at the methods used to calculate depreciation and the timing of revenue recognition. Performing a thorough field exam uncovers gaps in documentation where credits have been applied without proper paperwork or where goods have left the premises before being billed.

Lending Security

Risk levels change when a company ramps up production without increasing its administrative staff to handle the extra volume. Results from the field exam help banks decide whether to expand the limit on a revolving loan or to restrict access until better internal tracking tools are implemented on the floor. Exams reduce the risk of asset overvaluation.