Audit & Assurance

Stock
Audit

Comprehensive Stock Audit services by expert CAs - physical verification, inventory valuation, and compliance with accounting standards for businesses and lenders.

Physical Verification
Inventory Valuation
Bank / Lender Mandated
Overview

What is Stock Audit?

Stock Audit (also called Inventory Audit) is a systematic examination of a company's inventory records and physical stock to verify the existence, condition, valuation, and ownership of inventory. It is often required by banks and financial institutions for working capital assessment and by businesses to ensure accurate financial reporting.

The audit involves physical verification of stock at the business premises, reconciliation with book records, valuation as per Accounting Standard AS-2 / Ind AS 2, and reporting of discrepancies, slow-moving stock, and obsolete items.

Our experienced CA team provides thorough stock audit services across manufacturing, trading, and distribution businesses, helping you maintain accurate inventory records and meet lender requirements with confidence.

Physical Verification

On-site inspection to confirm stock existence, condition, and quantities

Valuation Check

Valuation as per AS-2 at lower of cost or net realizable value (NRV)

Stock Ageing

Identify slow-moving, non-moving, and obsolete inventory for write-offs

Lender Reporting

Comprehensive stock audit report for bank working capital assessment and renewal

Why Choose

Benefits of Stock Audit

Bank Compliance

Meet stock audit requirements for working capital facilities, CC/OD limits, and loan renewals with accurate reports.

Fraud Detection

Detect stock shortages, fictitious inventory, or misappropriation through independent physical verification.

Accurate Valuation

Ensure inventory is valued correctly as per AS-2 / Ind AS 2, avoiding overstatement or understatement of assets.

Better Working Capital

Identify slow-moving and obsolete stock to optimize inventory levels and improve cash flow management.

Audit Trail

Comprehensive documentation of inventory verification procedures and findings for future reference.

Stakeholder Confidence

Audited stock reports build trust with banks, investors, auditors, and other stakeholders.

Requirements

Documents Required

Inventory Records

  • Stock register / Inventory ledger
  • Physical stock count sheets
  • Purchase & Sales registers
  • Goods Receipt Notes (GRN) & Delivery Challans
  • Stock ageing report
  • Slow-moving & obsolete stock list

Financial & Other

  • Balance Sheet & Trial Balance
  • Valuation certificates (if any)
  • Insurance policies for stock
  • Warehouse / godown rental agreements
  • Stock transfer notes (for multi-location)
  • Bank statements & loan sanction letters
How It Works

Stock Audit Process

1

Planning

Understand inventory nature, locations, and audit scope with client

2

Physical Verification

On-site physical counting, stock tagging, and condition inspection

3

Reconciliation

Match physical stock with books, investigate variances, and suggest adjustments

4

Reporting

Issue detailed stock audit report with findings, valuation, and recommendations

FAQ

Frequently Asked Questions

Businesses with working capital or CC/OD facilities from banks typically require periodic stock audits. Manufacturing, trading, and distribution companies with significant inventory levels also benefit from stock audits for accurate financial reporting and internal controls.
Inventory is valued as per Accounting Standard AS-2 / Ind AS 2 at the lower of cost or net realizable value (NRV). Cost includes purchase cost, conversion costs, and other costs incurred to bring inventory to its present location and condition.
Typically, stock audits are conducted annually at the end of the financial year. However, banks may require quarterly or half-yearly stock audits for higher loan limits. Businesses can also opt for periodic internal stock audits for better inventory control.
If stock discrepancies are identified, the auditor reports the variances along with probable reasons. The business may need to adjust book records, investigate potential fraud/theft, or write off obsolete stock. Lenders may require corrective action as a condition for continued credit.

Get Your Stock Audit Done Today

Ensure accurate inventory reporting and meet lender requirements with our professional stock audit services.