Internal controls on inventory is a system of checks and balances that enables businesses to track and manage their inventory. It ensures the accuracy of inventory records, the security of stored items, and the integrity of accounts related to inventories. Internal controls can be divided into two categories: preventive and detective. Preventive controls are proactive measures taken ahead of time to prevent unwanted changes to inventory levels, such as having adequate safeguards in place to protect against theft or damage. Detective controls are designed to detect errors and irregularities in tracking and managing inventories, including frequent audits and reviews of all inventory activities. With good internal controls in place, businesses can confidently track and manage their inventories, avoiding potential losses and ensuring success.