What is Stock Audit ?
A stock audit is a systematic examination of a company's inventory to verify its accuracy and condition. It involves checking the physical stock against recorded quantities, assessing inventory management practices, and ensuring compliance with accounting standards.
Benefits
- Accuracy : Ensures that inventory records match physical stock.
- Fraud Prevention : Detects discrepancies that may indicate fraud or theft.
- Financial Reporting : Provides accurate stock valuation for financial statements.
Process /Steps
01
Plan & Prepare
Develop an audit plan and gather records.
02
Conduct & Execute
Perform physical inventory count.
03
Record and Compare
Compare physical count with records.
04
Verify Valuation
Assess inventory valuation.
05
Prepare Report
Summarize findings and recommendations.
06
Follow-up
Monitor implementation of recommendations.
Documents Required
- Inventory records and reports.
- Purchase and sales invoices.
- Stock movement logs.
- Physical stock count sheets.
Our Support?
- Audit Planning : Assist in preparing inventory checklists and audit plans.
- Execution : Conduct the physical count and reconciliation.
- Reporting : Prepare an audit report detailing findings, discrepancies, and recommendations for improvements.
- Resolution Support : Help in resolving discrepancies and improving inventory management.
Frequently Asked Questions
Stock audits are usually conducted periodically, such as quarterly or annually, depending on the company’s inventory management needs.
While not a guarantee, regular stock audits can help detect and reduce inventory theft by identifying discrepancies.