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A Stock Audit involves physically checking inventory levels and matching them with financial records to ensure accuracy and ownership. This process verifies the value and existence of inventory, confirming:
– Physical inventory matches accounting records
– Ownership rights are confirmed
– Inventory value is accurately reflected
There are several reasons why an organization needs stock audit including the following:
We employ industry-recognized techniques to ensure accurate and efficient inventory audits:
1. Physical Counting: Comprehensive counting of all inventory and assets on-site.
2. ABC Analysis: Classifying inventory by value and importance, enabling prioritized management and informed decision-making.
3. Cut-off Analysis: Temporarily halting inventory transactions to ensure accuracy during the audit.
4. Analytical Procedures: Examining financial metrics, including:
• Gross margins
• Inventory on-hand days
• Inventory turnover ratio
• Cost of inventory
To optimize operations and minimize discrepancies.
Asset Count: This process involves tracking every fixed asset within the organization. It serves as a detective control to ensure that no assets are misplaced, stolen, or unaccounted for. An asset register is created, maintained, and updated to facilitate ongoing monitoring of the organization’s permanent assets.
Asset counts are conducted during liquidation, as part of an external audit, during transitions from manual to automated systems, when relocating offices, or during interdepartmental transfers. The general processes and documentation necessary for an effective inventory audit also apply to asset counts.
