Stock Audit (Receivable Audits)
Stock audit or inventory audit is a term that refers to physical verification of a company or institution's inventory assets. Every business organization needs to perform an audit once a year to update and ensure that the physical stock and the computed stock match.
- For updating details of the balancing stock.
- To identify discrepancies between stock accounts and the physical stock.
- Update physical stock as stock record.
- For ensuring proper management of the stock.
Stock audit is the process of physical verification of the inventory including evaluation of inventory based on the source of the assignment.
The stock audit process is essential to reduce the preventable investment on stocks or inventory to establish proper balance of the process. Since high levels of stock results in overstocking that results in the poor value of cash flows and financial losses. Main reasons for executing the audit is to verify the discrepancies present in the stock record when verified with the physical stock which are necessary for the adjustment entries.
Following are the reasons to performing a stock audit:
Stock Audit Services is an important tool for physical verification of stock and inventory and for strengthening the internal control mechanism.
Accounts receivable are usually material items on the balance sheet; hence for auditing, it is integral to perform proper procedures to obtain sufficient audit evidence for coming to appropriate conclusion on receivables.
We at Sapiens have a dedicated stock audit team that ensures accurate calculation of physical stock with its comparison to the book.