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Stock Audit and its Advantages
What is Stock Audit
It is the physical verification of the inventory. However at times, it may also include valuation of the inventory; this would depend upon the terms of reference or the engagement letter of the assignment. A stock audit report is used to document the details or information about the existing stocks of the business that has been gathered during a stock audit. Annual stock audit reports provide important details that are used by businesses in their financial statements.
Emblaze Taxation and Consultancy Services offer Auditing and Stock Auditing Services in Kerala, India. We have a team of professionals and executives with abundant exposure in various managerial and accounting profiles. Our audit service helps reduce the risk of fraud and poor accounting.
An audit facilitates the provision of advice that can have real financial benefits for a business, including how the business is running, what margins can be expected, and how these can be achieved. Below are some key benefits of stock audits.
Key benefits of Stock Audits:
- Identification of slow-moving stock, obsolete stock, deadstock, and scrap.
- Avoidance of pilferage and fraud.
- Instant information of value of inventory.
- Cost reduction and bottom-line.
- Special arrangements for third party opinion, including for Agent warehouses.
- Reduction in gaps in the present inventory management process.
Advantages:
- An audit helps to identify weaknesses in the accounting systems and enables auditors to provide suggestions for improvements.
- An audit assures directors, who are not involved in the accounting functions on a day-to-day basis that the business is running in accordance with the information they are receiving. An audit also helps reduce the risk of fraud and poor accounting.
- An audit facilitates the provision of advice that can have real financial benefits for a business, including how the business is running, what margins can be expected, and how these can be achieved. Advice can cover anything from the tightening of internal controls to tax planning or reducing the risk of fraud.
- An audit will enhance the credibility and reliability of the figures being submitted to prospective investors. If an owner is planning on attracting investment or selling shares in the next three years, carrying out regular audits is highly beneficial.
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