A Stock Audit is the physical verification of inventory to ensure that the actual stock matches the recorded stock in the books of accounts. It is a critical part of inventory management and internal control, helping businesses identify discrepancies, prevent losses, and maintain financial accuracy.

Stock audits are often mandated by banks for businesses that have inventory-based loans, or voluntarily conducted by companies to maintain transparency and operational efficiency.

Objectives of Stock Audit

• Verify physical stock against book records

• Detect stock pilferage, damage, or mismanagement

• Ensure proper valuation of inventory

• Validate internal inventory processes and controls

• Report discrepancies and suggest corrective measures

Scope of Stock Audit

• Physical verification of raw materials, finished goods, work-in-progress, and packing materials

• Reconciliation of physical stock with stock registers

• Review of stock aging reports and expiry/damage losses

• Validation of inward/outward movement of goods

• Assessment of inventory valuation methods (FIFO, LIFO, etc.)

When is Stock Audit Required?

• Bank-mandated audits for businesses with working capital or cash credit facilities

• Year-end audits as part of statutory or internal audit

• Routine checks in manufacturing, trading, and retail companies

• Pre-merger/acquisition assessments to verify asset accuracy

Benefits of Stock Audit

• Improves inventory accuracy and transparency

• Reduces wastage, pilferage, and holding costs

• Enhances decision-making with reliable stock data

• Ensures compliance with accounting standards and loan covenants

• Builds trust with stakeholders, including banks and investors

Why Choose Us for Stock Audit?

• Experienced auditors with sector-specific knowledge

• Customized audit checklists and structured reports

• Fast, accurate, and independent verification

• Compliance-focused approach with practical insights

• PAN India service availability