Analytical Review Procedures are carried out on the basis of Statistics, facts of current and past data. So, if you want to verify inventories using this procedure, you can adopt the following ARPs:

• Quantitative reconciliation of opening inventories, purchases, production, sales and closing inventories;
• Comparison of closing inventory quantities and amounts with those of the previous year.
• Comparison of the inventory turnover ratios for the current year with that of the previous year and with industry standards if available.
• Comparison of the closing inventory (Raw materials, closing work-in-progress and finished goods are percentage of total inventories) with the corresponding figures of the previous year.
• Comparison of current year gross profit ratio of the previous year.
• Comparison of actual inventory, purchase and sales figures with the budgeted figures if available.
• Comparison of raw-material yield/wastage with previous year figures.