Industry · Manufacturing · Construction

Audit in industry and manufacturing –
from food production to – construction and metal

I audit manufacturing and industrial companies with an understanding of sector specifics: inventory and work-in-progress valuation, construction contracts, seasonality and complex supply chains. Experience with leading Polish food manufacturers, the metal industry and construction.

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No obligation • 20 minutes • quick assessment

15+

Industrial and manufacturing entities

20+

Years of experience

Sectors: food, metal, construction, print

100%

Experience with foreign groups

Food and meat production

Metal industry

Industrial printing

Construction and infrastructure

Long-term contracts

Inventory and WIP valuation

Manufacturing group audit

Projects from industry and manufacturing

Selected case studies – industry

Projects for leading Polish manufacturers and foreign industrial groups present on the Polish market.

Statutory audit – meat and food industry

Situation

Large Polish companies from the meat and food industry – entities with extensive production, seasonality and a complex cost-of-production structure. Raw material, work-in-progress and finished goods inventory as a key risk area.

Action

Audit of the financial statements with particular emphasis on inventory valuation (production cost methodology, NRV tests), production cost accounting and assessment of provisions for obsolete stock.

Result

Long-term audit cooperation. Methodological recommendations on production cost calculation implemented by clients.

Long-term cooperation with leading manufacturers

Construction group audit – HGB contract + Polish standards

Situation

Polish subsidiary of a large European construction group, reporting both to the Polish court register and to the foreign headquarters applying HGB. Construction contracts worth hundreds of millions of PLN.

Action

Audit of the financial statements in accordance with Polish accounting law, with particular focus on long-term contract accounting using the percentage of completion method, claims valuation and contract provisions.

Result

Unqualified opinion. Support for the finance department in reconciling differences between Polish accounting and headquarters requirements under HGB.

Reconciliation of Polish GAAP with HGB for European headquarters

Audit of a specialist printing equipment manufacturer

Situation

Polish company acting as distributor and service provider for specialist textile printing machines from a global manufacturer. Complex structure of service settlements and long-term warranty agreements.

Action

Audit of the financial statements with analysis of service contract accounting, spare parts valuation and assessment of warranty provisions. Verification of revenue recognised over time.

Result

Full audit documentation. Recommendations on the policy for recognising revenues from multi-year contracts in accordance with group requirements.

Revenue policy recommendations accepted by the group

Industry challenges

Key accounting challenges in industry and manufacturing

Inventory and work-in-progress (WIP) valuation

Production cost calculation, fixed and variable cost allocation, NRV tests – in manufacturing this is one of the most important areas of audit risk.

Long-term contracts – percentage of completion method

Multi-year construction and engineering contracts require precise estimation of the degree of completion and claims valuation – each deviation materially affects results.

Fixed assets and production line valuation

Machinery, production lines and plant properties – useful lives, write-downs and impairment tests require industry knowledge.

Group accounting with foreign headquarters requirements

Many Polish industrial companies report simultaneously under Polish GAAP (KRS) and group standards (IFRS, HGB, US GAAP) – reconciling the differences requires a consistent accounting policy.

Warranty and complaint provisions

Manufacturers with long warranties or a history of complaints must accurately value provisions – provisions that are too low represent audit risk, too high distort results.

Seasonality and working capital management

Food and construction industries have marked seasonality affecting the assessment of liquidity, working capital management and correct presentation in the annual financial statements.

Do you have an industrial company requiring an audit or financial analysis?

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FAQ

Frequently asked questions

Accounting questions specific to manufacturing – inventory valuation, production contracts, and inventory counts.

How should work-in-progress (WIP) and finished goods be valued?▾

Inventories of WIP and finished goods are measured at cost of production, comprising direct materials, direct labour, and a reasonable share of fixed and variable production overheads. The auditor verifies the completeness of the cost build-up, the overhead absorption rate, and – critically – whether the carrying amount does not exceed the net realisable value (NRV test). In companies with complex production cycles, WIP valuation errors can materially distort profit and the balance-sheet inventory figure.

What does an auditor check during a manufacturing warehouse inventory count?▾

The auditor attends or observes the physical count, verifying counting procedures, the assignment of materials to correct production orders and batches, and storage conditions. In manufacturing, particular attention is paid to slow-moving or obsolete inventory (process waste, obsolete spare parts) and whether write-downs are complete. The timing and methodology of the count must be agreed with the auditor before it takes place – auditor absence at an inventory count may result in a scope limitation.

How are long-term production contracts audited?▾

Long-term contracts (e.g. supply to automotive, defence, or infrastructure) raise questions about revenue and cost recognition (percentage-of-completion under IFRS 15 vs completed-contract under Polish GAAP), measurement of expected losses on onerous contracts, and the correct presentation of customer advances and contract liabilities. The auditor examines margin assumptions in detail, including material price risk and the completeness of provisions for foreseeable losses.

What ESG and sustainability reporting risks affect manufacturing companies?▾

From 2024, an increasing number of manufacturing companies are subject to CSRD and mandatory reporting under ESRS standards – particularly large enterprises, regulated-sector companies, and suppliers to industries with strict supply-chain requirements (automotive, defence). The auditor or independent assurance provider reviews the sustainability report, extending the traditional audit scope to include environmental and social performance data.

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