Stock audit
NIHIT MALHOTRA (29 Points)
23 August 2016
Dear All,
Provisions regarding stock audit(applicability,points to be kept in mind,etc).
Please specify
5 Replies
CA Amrita Chattopadhyay
(Audit & Assurance)
(13459 Points)
Replied 25 August 2016
The main objective of stock audit is to ensure that the stock maintained in the books reconciles with the stock available physically.
During the stock audit you can observe the following:
a. Whether the stock are properly segregated specially the stock of company and stock of third party
b. Stock of damaged goods whether they are maintained separately
c. Usage of proper bin cards for the appropriate identification of stock
d. Maintenance of reorder levels
e. List of stock in transit which are included in the stock register
f. Stock given to the job workers and may not be available physically
NIHIT MALHOTRA
(29 Points)
Replied 25 August 2016
Dear Mam,
What about the applicability?Is there any threshold limit exceeding which the stock audit is mandatory?
CA Amrita Chattopadhyay
(Audit & Assurance)
(13459 Points)
Replied 25 August 2016
CARO mandates the verification of stock by the management. Thus the threshold limit would be limit applicable to CARO
CA.Vinita Gupta
(Deputy Manager- Finance)
(2923 Points)
Replied 25 August 2016
Stock Audit is usually done when an entity takes Loan ie EPC/PCFC/CC against stock of Goods. The Stock audit is done to ensure that there is adequate stock against the Limits availed by the Business Entity.
Kindly check the Stock of Goods, Physical verification and valuation
Check the Debtors position and its Ageing
Check the Creditors Position and the Ageing
Check the CA- CL and the Net should at least cover 75%, Check the Sanction letter from the bank and see if the Withdrwal are within limits
SSG
(1936 Points)
Replied 31 August 2016
Different banks have different borrowing limits beyond which stock audit is done.
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