Stock audit of a manufacturing company!!!

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Rajesh (Querist)
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04 April 2012 Dear Experts,
Please tell me what are the procedures to be followed with respect to a stock audit of a manufacturing company should be done if we are the internal auditors.
Please explain me in detail right from GRN creation to accounting the purchases.
Thanks & Regards,
Rajesh.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 April 2012 For conducting stock audit you have to physically count the stock and compare the same with the stock appearing in the books.

The variances, if any, are to be reported.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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07 April 2012 The following are the steps:
1) Take the list of Stock in Trade
2) Check the stock on random basis if the stock is huge otherwise check each and every item.
3) Compare the stock with book stock and physical taken by you.
4) Difference to be explained by the in charge.
5)Find out why there is difference
6) Find out that any breakage or out dated stock is shown in the books of account but from stock it is removed.

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