Stock Audit
Stock audit is considered as an important auditing term which refers to the physical verification of the inventory. Stock Audit is an independent check on the functions of the management, which has some value in the eyes of law and the taxation authority.
Stock audit, in general usage is considered as an important auditing term which refers to the physical verification of the inventory. In other words, stock audit is a statutory process which every business institution needs to perform at least once in a financial year
Why is Stock Audit Conducted? Stock Audit is conducted to ensure:
i. Proper Preservation/Storage of Stock.
ii. Whether obsolete and Non Moving stock has been separately identified?
iii. Whether stock is adequately insured against all perils?
iv. Whether the Physical Stock Value confirms with the Value shown in Bank Stock Statement?
v. Whether the stock is owned by the borrower & finance is made available against the paid value of stocks only.
vi. Whether the Age-wise & Party-wise Book debts analysis submitted to the bankers tallies with the books.
