- Planning and preparing for the audit
- Physical verification of the stock
- Reconciliation of the physical stock with the stock records maintained in the company’s books.
- Valuation and Quality assessment of the stock
- Documentation and Evidence recording throughout the audit
- Analysis and reporting after completion of audit
- Recommendation and follow up by the auditors
Benefits of stock audits for business!
- Detecting and preventing stock pilferage, theft or misappropriation.
- Identifying and resolving discrepancies between physical stock and book records.
- Verifying the accuracy of stock valuation and inventory management practices.
- Improving internal controls and stock management procedures.
- Complying with regulatory requirements and accounting standards related to stock and inventory reporting.
Overall, stock audits provide companies with valuable insights into the state of their inventory, aiding in better decision making, and ensuring the integrity of financial reporting related to stock and inventory.
Supportive Documents Required!
- Stock records and registers: Stock ledger, bin cards and stock transfer notes.
- Purchase and Sales Documents: Purchase invoices, sales invoices and delivery challans.
- Good Receipt Notes (GRNs) and Goods Issue Notes (GINs)
- Stock valuation Reports
- Stock reconciliation Statements
- Inventory Policies and Procedures
- Stock count sheets or worksheets
- Stock movement records
- Vendor agreements and contracts
- Customer agreements and Sales Contracts
- Asset Register