Why is Inventory Control Important? Inventory is a significant asset and for many companies the largest asset Inventory is central to the main activity of merchandising and manufacturing companies. Mistakes in determining inventory cost can cause critical errors in financial statements Inventory must be protected from external risks( such as fire and theft )and internal fraud by employees c8-3C8 - 3 Why is Inventory Control Important? Inventory is a significant asset and for many companies the largest asset. Inventory is central to the main activity of merchandising and manufacturing companies. Mistakes in determining inventory cost can cause critical errors in financial statements. Inventory must be protected from external risks ( such as fire and theft) and internal fraud by employees