Physical Verification of Stock & Fixed Assests Cutoff analysis : Observe the physical inventory count. Reconcile the inventory count to the general ledger Test high-value items. Test error-prone items Test inventory in transit Test item costs. Review freight costs. Fixed assets Verification : Recognize the accounts in which fixed assets are typically recorded. Note the changes in a fixed asset audit, based on the types of assets being audited. Cite the situations in which inherent risk is more likely to be high. Describe the fixed asset roll forward report. Recognize the ways to detect assets that were dispositioned but not recorded. Note the circumstances that can trigger a possible asset impairment.