Inventories are tangible property held for sale in the ordinary course of business, or sometimes even in captive consumption. It includes raw materials, work in progress, finished goods, by products, loose tools, consumables, stores and spare parts meant for replacement in the normal course. Inventories normally constitute a significant portion of the total assets of a unit. Hence audit of inventories assumes special importance.
Stock Audit is the study and evaluation of internal control system relating to inventories, to determine the nature, timing and extent of audit procedures to be conducted. Internal Control procedure includes a system of cross‑checking the data generated by different operating departments and also over receipts, issues, physical inventories, and inventory records. Stock audit also ensures that inventories included in the financial information are of physical existence and represent all inventories owned by the entity and is correctly valued and judiciously applied according to the aging feature of stocks. These judgements are given after proper examination of records, stock taking and confirmation from third parties when significant stocks of the entity are held by third parties, examination of valuation and disclosure and other analytical review procedures.
It is important to know the purpose of conducting stock audit as different audits have different approach like to keep control on pilferage of smaller items or to ensure proper storage for larger or damageable goods. Stock audit benefits the unit through prevention and early detection of Frauds, proper preservation, segregation of obsolete & non-moving stock and adequate insurance cover of stock.
FINMART assures its clients to manage their inventories judiciously by following a strict audit and reporting mechanism that ensures that every aspect of stock is evaluated and reported in a transparent manner to levels concerned. With companies today operating across multiple locations with various channel partners, FINMART has an added advantage of various associates and branches thereby ensuring quicker audits for clients.
Any individual or sovereign entity can get Stock Audit done as per its business needs.
The documents needed vary from case to case. Let FINMART understand your needs and assist you in documents requirement.