Case Study On Inventory Management Auditing In Country A’s Department Of Defense

The implementation of the audit accountability system and the comprehensive implementation of the government’s internal control audit system require the government departments to improve and optimize the level of asset management.By the end of 2018,the total amount of state-owned assets in China’s administrative institutions amounted to 33.5 trillion yuan.After the rights of these state-owned assets were confirmed and truthfully confirmed and measured,protecting the safety of these assets and improving the efficiency and effectiveness of their use will be the use of state-owned assets.The more difficult task of the management department is also the responsibility of the external supervision and audit departments such as the Ministry of Finance and the Audit Office.These assets are distributed all over the country,some even overseas,and the physical assets are in different states.Government audit will be one of the important ways to improve their efficiency and effectiveness.The inventory of the Ministry of Defense of Country A is widely distributed,the amount is huge,and the physical environment of the storage location and the distribution accessibility are greatly different.The Accountability Office of Country A has conducted an uninterrupted audit of the inventory assets management of the Ministry of Defense for nearly 30 years,which not only helps it greatly reduce the amount of inventory,but also increases the efficiency of inventory distribution and visibility of inventory.The object of case study can provide reference and enlightenment for state-owned assets management audit of administrative institutions.The Ministry of National Defense of Country A has built and maintained a far-reaching military strength for its national strategic services,and has the ability to start rapid military operations globally.In order to ensure the availability of inventories and the successful completion of military operations,the primary purpose of inventory management of the Department of Defense is to ensure the availability of inventories when needed,and relatively few economic considerations for inventory management.National defense expenditure is the highest proportion of federal free expenditure items,and it is one of the important reasons for the federal government ’s fiscal deficit in country A repeatedly reaching new highs.Since 1990,the Accountability Department,a member of Congress,has included inventory management in its high-risk audit list,and urged the Department of Defense to improve the efficiency of inventory management.While ensuring the timely availability of inventory,it reduces the total cost of inventory management and increases the efficiency of the use of federal funds.After more than 20 years of continuous audits and the efforts of the Department of Defense,in 2019,the inventory management of the Department of Defense is no longer rated as a high-risk project by the Accountability Office.This paper uses literature research and case analysis to conduct research.First,it summarizes the relevant research and practice at home and abroad,and then takes the accountability audit of the State A Accountability Agency for the Ministry of Defense for more than 20 years as the main line,referring to the high-risk inventory report issued by the Accountability Agency every two years,the Ministry of Defense inventory The management-related special reports and the improvement report issued by the Ministry of National Defense summed up the problems discovered by the Accountability Office of Country A during the audit,the continuously put forward organizational efforts to improve inventory management,and technical recommendations for reducing inventory management.At the same time,this paper describes the characteristics and management objectives of the Department of Defense ’s inventory assets,introduces a risk-oriented audit framework,and combines the public fiduciary duty theory and risk management theory to analyze the audit process that has continued since 1990.In the audit of the inventory management of the Ministry of Defense,the Government Accountability Office of Country A evaluated inventory management from three links: inventory management,logistics distribution,and asset visibility.The Accountability Department evaluated the Ministry of Defense ’s efforts to improve inventory management from five perspectives: leadership commitment,solution capability,action plan,effective supervision,and progress display.It recommended that the Ministry of Defense improve inventory from three aspects: inventory,material allocation,and asset visibility.Management,these evaluation perspectives and urging recommendations can be used for reference by audit institutions,and the inventory management links and specific technical measures can also be used by organizations that have a high proportion of assets in inventory and cannot tolerate lack of inventory.Due to the complicated background knowledge required for writing and too many reports to be absorbed and digested,the research depth of this paper needs to be improved.