In stock audit, the auditor ensures himself about the quantity, quality, composition and actual value of the stock.
Need for stock audit:
- The simple reason for audit and physical verification of the stock is that it acts as a safeguard against occurrence of both, the internal and external frauds.
- To find out whether there is a sufficient and suitable environment for preservation of the stock.
- To find out whether the stocks are safeguarded against theft or misuse by any person at any time
- To find out whether the stocks and securities can get degraded
- To find out whether the stocks are safeguarded against fire, floods, natural calamities etc.
- To find out whether the stocks are in realisable conditions
- To find out whether stock is owned by the party
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