Procedure for physical stock verification

Internal Audit 6319 views 5 replies

SAGAR

ARTICLED ASSISTANCE

236 Points Joined November 2010

Dear friends,

Day before i went to a shoe warehouse for physical stock verification. 6789/- pair shoe were physical available at that store. and the stock as per the system/tally was 6809/-. so the variance was 20 pairs shortage.

I physicaly scanned all the shoe boxed and captured the total ESN also.

But my boss was saying that physicaly scanning was not enough, we have to check the followings also

1) The shoe available in the box was belongs to that company/brand or local made?

2) Whether u opened all those boxes and checked that physically shoe available or not?

3) The ESN number on the box and the shoe no/size was related or not?

Friends can u say that all the above was possible in a physical stock verification of warehouses, if possible how ????

Again if the above was not possible, how to overcome the above ??

Dear friends pls help/suggest me in this, and how to manage this situation

Replies (5)

Ganeshbabu K

Audit and Tax Advisory

48564 Points Joined May 2012

Yes

what your boss said is true,

this is what stock audit is ,

mere counting of items is not a stock audit,,

if you talk about possibility to check all the pairs,

yes you should check as the same was said by your boss only...

other wise you can go for sample

i have done A big comminication company stock audit once,,

the issue was it is a big ware house and all tower items are a big dumps, ho can you count quantity in those cases,and there is around some 845 dg sets were there,that to specifications wise means 500kv,400kv like that we have to verify, which is not practicable

and that ware house was very big and there is a possibility of snakes also

we have given a report mentioning what ever difficulties we have faced and we have recommended some useless items to dispose, and recommended some safty measures

in this way if your boss gets assignment for checking full pairs of shoes,you have to do like that only,

if there is any like what i did in my situation, you have to get directions from your boss

otherwise you have to do what your boss said

SAGAR

ARTICLED ASSISTANCE

236 Points Joined November 2010

But My point was "how i ll assure that the shoe which was present in the box was belongs to same brand" and "how i ll say that the shoes were not wrongly packed" i mean the ESN No of the shoe box and shoe which was present in the box both are same.

He also refuseing to do check sample. He need 100% verification.

as per me the Shop keeper or the warehouse incharge only can give that assurance both in physically and technical way

Ganeshbabu K

Audit and Tax Advisory

48564 Points Joined May 2012

YOU CAN TAKE A BRAND WISE LIST ALONG WITH THEIR SIZE NUMBERS

YOU JUST SEE WHETHER THEY ARE PACKED ACCORDINGLY

MISSING ITEMS WILL BE REPORTED

SAY ON BOX IT WAS SIZED8,BUT INSIDE SHOE TYPE WAS 7,THEY ALSO REPORTABLE

IF YOUR BOSS SAID IT IS 100% U HAVE TO DO BY TAKING SOME MANPOWER,

AFTER AUDIT YOU HAVE TO TAKE SIGNATURE FROM RESPECTIVE INCHARGE ON YOUR REMARKS,

BETTER ASK YOUR SENIORS WHO HANDLED THAT WORK EARLIER,THEY MAY SUGGGEST AN EASY WAY OUT

CA Ashish Pathak

Employed at Cipla Ltd.

2779 Points Joined April 2011

Sagar, its not practically possible for you to verify the contents of each n every boxes of shoes. You should just verify it on random basis (taking few boxes as samples) that the content of the box is same as the descripttion given on outside box. Your boss has gone nuts. You are just an article not his servant to check each n every shoes in the audit. My suggestion to you is to stay away from such stock audit assignments as you will get nothing new to learn in it.