INVENTORY & DEBTORS AUDIT
Stocks and Debtors are two very important areas requiring attention because they are the essence of every business activity and they provide the true indication of strength and vitality of a business.
The primary objective of verification, from any point of view, is to ascertain whether they are realizable in cash for the value stated. The best symptom for this is a good, healthy, regular movement of both.
The thrust of any stock verification process is to verify the system followed or the procedure adopted to compile the quantities of stocks as on a given date and the rate applied for evaluation.
The audit objectives remain the same though the accounting procedures vary from business to business, country to country, and product to product.
It is a running account facility where deposits and withdrawals are permitted. Stock audit acts as a warning signal to those accounts which are likely to turn into NPA. Stock audit also helps in prevention and early detection of frauds.
Simply put, a stock audit, also known as inventory audit, is the process of verifying whether the physical goods available at your store’s warehouse match the results available at the stock registry.