WHAT IS STOCK AUDIT?
Stock or Inventory means the assets:
which are held for sale in the ordinary course of business;
b) in the process of production for such sale; or
in the form of material or supplies to be consumed in the
production of goods or services for sale
(As per Accounting Standard 2)These goods are normally stored in the godowns, which are generally
located near the factory.
Audit is an independent check on the functions of the management,
which has some value in the eyes of law and the taxation authority.
Audit refers to thorough check of the entire system so that it facilitates
Prevention and early Detection of frauds.Stock & Receivables
Audit is one of the most important aspect of
the overall exercise of audit of any organization. In stock and
receivable audit, auditor ensures himself about the quantity, quality,
composition and actual value of the stock & the debtors.