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Date : ………

Stock Audit of…

Objectives of the Stock Audit

  • To ascertain whether physical stock tally with the stock as per books/stock registers as of …….
  • To ensure proper internal control over stock management.
  • To ensure proper preservation/storage and handling of stock.
  • To identify whether there exists any obsolete/expired stock & if yes, whether it has been segregated & written off.
  • To verify whether the stock is adequately insured against fire and other natural calamities

Steps involved in the stock audit

  • Personal visit to ……..restaurant Warehouse, outlet……… and verification of stock, located at ………………………………………
  • Discussion with the employees of Jumbo restaurants to get an in-depth knowledge of various stock.
  • A physical count of inventories. Select a few major items listed on the original stock sheets and physically verify them to ensure they do exist and are properly written on the original stock
  • Check the internal control of the company for stock management

Audit Conclusions and Summary of Findings

Management Response

PHYSICAL STOCK COUNT – CHECKLIST / PROGRAM

1 Date or dates work carried out
2 Names of Prudential Auditing staff observing the stock count
3 Brief description of the nature of business of the client
4 Type of stock count (unit/Value)
5 Value by categories/locations and locations covered by the observation
6 Organisation Control
6.1  Are there adequate written instructions to all the employees maintaining stock, setting out their specific responsibilities?
6.2  Who has overall control of the store?
(Name with responsibilities)
6.3 How stock record is maintained
(manual or any software)
6.4 Are the locations properly prepared for stock count with materials arranged and stacked in a convenient manner for counting?
6.5 Are obsolete, slow moving stocks and substandard materials segregated or otherwise adequately identified?

Arrangement for expired items checks? How to deal with that?

6.6 Is there a proper control of the issue and return of stock count sheets e.g. pre-numbering and accounting for all numbers?
6.7  Are movements of stock or materials during the stock count properly controlled to ensure the same stocks are not included twice or omitted?
6.8 Is there adequate control to ensure that all invoices for purchases included in the stock valuation are taken up in the books and that all sales are excluded from the stocks?
6.9 Are there any goods in transit, which should be included in stock?
6.10 Note the following:

a) Last GRN No. and date

b) Last GIN No. and date

c) Last Sales Invoice No. and date

d) Last Purchase Invoice No. and date

e)  Any other significant documents involving stock moments.

7. Internal Stock count
7.1 How frequently the internal team of the company do physical stock count.
7.2 Is stock counted or checked by people not responsible for custody of the stock?
7.3  Are there a count and a separate check by another individual?
7.4 Do the counters and  checkers sign or initial for work done on the stock sheets?
7.5 Do the counters enter descriptions on the stock sheets or this is done in advance?
7.6 If the counters enter descriptions, are they competent to describe the stock accurately?
7.7 Are the stock count teams concerned with the condition of the stocks as to whether they are obsolete, slow moving etc.
7.8 Is so, are they competent to decide and how is the information indicated on the stock sheets?
7.9 Are all the stock actually counted or are estimates made in some cases?
7.10 Are there adequate safeguards against deterioration and access by unauthorized persons?
7.11 What action is taken where differences are disclosed between the physical count and main stock records?

Annexures-

1. Stock list duly signed by storekeeper after being physical counted.

A. Dry Stock

B. Perishable Items

C. Liquor/Drinks

2. Others if any like photos of store

Signature of staff and date

Prudential Auditing

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