How often must dealerships conduct an inventory audit?

Dealerships are required to conduct an inventory audit annually to ensure accuracy in their vehicle counts and records. This annual audit helps maintain compliance with state regulations, track inventory effectively, and prevent discrepancies in financial reporting. Regular audits also enhance operational efficiency by identifying potential issues such as theft or mismanagement of inventory.

While more frequent audits, like monthly or quarterly, could offer additional oversight, the legal requirement set forth for most dealerships is to perform these audits at least once a year. Biennial audits, while they may suffice in some contexts, do not meet the standard for regular accountability necessary in vehicle sales operations. Thus, an annual audit strikes a balance between thoroughness and practicality for compliance and operational needs.