While preparing books of accounts of company,whether CA can depend on valuation and quantity of stock as recorded in books of accounts of Co. or he should advice company to carried out their stock audit or he should do physical verification?
Shobhit Jain (CA) (4892 Points)
12 November 2016While preparing books of accounts of company,whether CA can depend on valuation and quantity of stock as recorded in books of accounts of Co. or he should advice company to carried out their stock audit or he should do physical verification?
CA VIRAL SANGHVI
(Finance head)
(681 Points)
Replied 12 November 2016
You should rely on the management representation,please take the value and quantity details on comopany's letterhead and it should be signed by management
you can write a note in notes to accounts that
The quantity and value of stock are given and certified by the management.
and if caro is applicalbe to the company than you have to mentioned that
i) whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so, whether they have been properly dealt with in the books of account.
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