Cut-off disputes rarely start with dramatic fraud. They start with a truck that left on 30 December, a delivery note dated the 31st, and a sales invoice posted on 2 January. For manufacturers and distributors in Japan, those few days around 31 March or 31 December are where revenue and inventory stories diverge.
What auditors typically request
Expect a shipping log for the final week of the period, matching delivery notes to invoices, and a sample of goods-in-transit items. If your warehouse and billing systems use different cut-off clocks, reconcile them before fieldwork — not during it.
A short finance-team checklist
- Freeze the open sales order list at period-end and note which shipments left the dock.
- Separate bill-and-hold arrangements; document why title transferred without physical movement.
- Reconcile inventory receiving dates to purchase accruals for the first week of the new period.
None of this replaces an audit. It does reduce the number of late adjusting entries that surprise the board when the auditor’s report is nearly due.