You have been appointed as an auditor of ABC Hotel, a three star hotel, for Financial Year 2022-23. As an auditor what are the special points that…

(a) Verification of inventories in the nature of food and beverages: The inventories in any hotel are both readily portable and saleable particularly the food and beverage inventories. It is therefore extremely important that all movements and transfers of such inventories should be properly documented to enable control to be exercised over each individual stores' areas and sales point. The auditor should carry out tests to ensure that all such documentation is accurately processed. Therefore, following may be noted in this regard: (a) All movement and transfer of inventories must be properly documented. (b) Areas where inventories are kept must be kept locked and the key retained by the departmental manager. (c) The key should be released only to trusted personnel and unauthorized persons should not be permitted in the stores area. (d) Many hotels use specialized professional valuers to count and value the inventories on a continuous basis throughout the year. (e) The auditor should ensure that all inventories are valued at the year end and that he should himself be present at the year-end physical verification, to the extent practicable, having regard to materiality consideration and nature and location of inventories.