Stock audit, in general usage is thought of an important auditing term that identifies the physical verification of this inventory. However at times, it might also involve the evaluation of the stock but it would be based on the terms of the engagement letter of the mission. When going forward, it is very important to remember and keep in account the purpose for which the audit has been conducted because distinct audits may have distinct strategy which would ultimately depend on the aim.
In other words, the stock audit is a statutory process that every business organization needs to perform at least once in an economic year. As far as the stock audit process is involved, the process mainly involves the counting of material stock presenting the detailed premises, and verifying the same with computed stock owned by the business. The reason and objective behind executing this are to correct the miscalculations present in the book capital when compared to material stock bypassing necessary correction entries.
Here are the causes why one should look ahead to the stock audit :
To update the initial stock details in shopper.
To recognize the disparity among book stocks also known as calculated stock and physical stock.
To refresh the actual physical stock as book stock.
To ensure individual preservation and administration of stocks.