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Stock audit, normally usage is taken into account as a crucial auditing term that refers to the physical verification of the inventory. But sometimes, it should additionally involve the valuation of the inventory however it might rely on the terms of reference or the engagement letter of the assignment. Once heading forward, it's vital to recollect and confine thought the aim that the audit is being conducted as a result of completely different audits could have different approach which might ultimately rely on the aim.
In alternative words, stock audit may be a statutory method which each and every business establishment must perform a minimum of once during a fiscal year. As far as the stock audit method is bothered, the method chiefly involves the tally of physical stock presenting the required premises and confirmative identical with computed stock maintained by the corporate. The explanation and purpose behind corporal punishment this can be to correct the discrepancies gift within the book stock compared to physical stock by passing necessary adjustment entries.
· To update the opening stock details.
· To identify the discrepancy between book stocks also referred to as computed stock and physical stock.
· To update the particular physical stock as book stock.
· To ensure correct preservation and handling of stocks.