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Joined March 2019
Again it falls under substantive procedures: stock
It mainly focuses on presentation and disclosures INDAS 2, inventory. Auditors count, timing of stock count is for Auditors evidence, but however, IndAS 2 covers presentation, recognition, measurement and disclosures. No principle or rule had ever considered purchase price into this standard.
For your query, the auditors evidence of purchase, count, warehousing, and timing of calculating closing stock needs to be mentioned (documented) in their reports. Now again, PURCHASES CUT-OFF meaning, all transactions related to purchases must be recorded in the same year for reporting Inventory & Creditors accurately. I’m of the opinion that, here, IndAS plays an important role and Auditors inspection of stock helps to recognise the right amount of payables and inventory in the balance sheet. From this, you can guess what went wrong! If closing balances are wrong, there is a weak internal controls.