stock audit | stock audit for banks | stock advisory in Bangalore

Stock Audit Services

According to the 2013 Companies Act, a set of guidelines and rules govern the auditing process. It looks at a company’s financial statements to determine whether the prepared statements are accurate and fair in light of business operations.

Similar to this, a stock audit is a procedure that refers to a physical inspection of the inventory and includes an assessment of the inventory items in light of the assignment’s reference.

In order to maintain proper process balance, it is essential to reduce unnecessary investments in stocks or inventory. High stock levels can lead to overstocking, which can cause poor cash flow value and financial losses.

The auditor’s job during the examination process is to verify the statements. The auditor should note any fraud or inconsistency by the company management in his report if they are discovered. The auditor is prohibited from conducting an audit under the presumption that the company’s management may have engaged in fraud.

The primary goals of the audit are to eliminate any necessary adjustment entries by resolving inconsistencies found in the stock record when compared to the physical stock. It is eager to conduct a stock audit for the reasons listed below:

  • The starting stock information to be updated.
  • To locate the discrepancy between physical stock and stock records, also referred to as computed stock.
  • To update a stock record with current actual physical stock.
  • To guarantee proper stock handling.

Objective of Stock Audit

Inventory audits, also called stock audits, are conducted to assess the raw materials that are transformed into finished goods. Information on the quantity and quality of raw materials on hand should be kept up to date.

Inventory audits, also called stock audits, are conducted to assess the raw materials that are transformed into finished goods. Information on the quantity and quality of raw materials on hand should be kept up to date.

Procedure of Stock Audit

These steps have been a part of the procedure since the beginning of the year, or at the time when the first stock was added to the system.

When new stock enters the facility, it is barcoded (labeled/marked), registered, and entered into the system for purchase or use. These barcodes are currently scanned each time an item is taken out of stock for any reason. Additionally, the purpose must be entered in the field provided in order to be known later and verified.

This process continues after the stock runs out and new stock is required. After the stock runs out, its variable use is examined for its requisition.

You can check your stock against these entries and its consumption when a stock audit is performed.

When you carry out all the tasks on a regular basis, the process is very simple. Simply follow all the necessary steps whenever an item is moved or consumed, starting with barcoding it and ending with scanning and uploading. When the audit is carried out, it aids you in verifying the information and specifics.

There are specific steps that must be taken in accordance with a software’s stock audit process, such as:

  • Report Flash
  • Scheduling Stock
  • Location Barcoding
  • Global Counting
  • Scanning
  • Uploading of Scans
  • Variance Analysis
  • Sign Off

Stock Audit Checklist

One crucial area of any business where fraud is more likely to occur is inventory. Its department is where thefts and damages happen more frequently.

For everything to work effectively, it is best to have tight control over all processes, checklists, and regular stock audits. The inventory audit check list is provided below.

  • Inventory records are kept using stock audit software, which is typically integrated with accounting.
  • The procedure for stock valuation, the elements of inventory cost, and the valuation method
  • Periodic comparison of stock records with actual stock.
  • Format and content of MIS related to stock.
  • Stocks are physically secure with CCTV and firefighting tools.
  • Stock Insurance
  • Inventory is divided into high, medium, and low value stocks.
  • Inventory held by outside parties.
  • Old stock, expired stock, stock with short shelf lives, and perishable stock.
  • Inventory levels and analysis of inventory age.
  • Inventories with software duplicate codes.

Benefits of Stock Audit

  • Cost savings and an increase in profitability.
  • Elimination of fraud and theft.
  • Accurate data on the value of the inventory.
  • To reduce the gaps in the inventory management processes.
  • Special considerations for a second opinion.
  • The effective control mechanism in business management.

Why Choose Canest?


We provide cost effective services for our clients.


Online service portal makes our process superfast.


Bunch of services to fulfil your business requirements.


15+ Years’ experience of providing online CA services.