Of the following, who should conduct physical observations of a company's inventory to prevent inventory theft?

• A. Purchasing Supervisor
• B. Warehouse Personnel
• C. Sales Representative
• D. Purchasing Agents

Answer: (C)

Independent verification is the key idea here. To deter inventory theft, the observer should be outside the hands-on handling and approval processes so their findings aren’t influenced by those who have access to the stock or purchasing authority. An external observer who doesn’t touch the inventory or approve purchases provides a more objective check and is more likely to spot discrepancies that insiders might miss or conceal.

A sales representative fits that role in this context because they typically don’t handle inventory, aren’t involved in stocking or purchasing decisions, and aren’t part of the internal control process. Their independence helps ensure observations of the physical stock are unbiased, increasing the chances of detecting theft or errors. In contrast, warehouse personnel directly manage and count inventory, which can compromise objectivity, and purchasing supervisors or agents have a stake in the procurement process that could influence records.