Stock Audit
Who Needs This?
Businesses availing working capital loans secured against inventory.
Companies required by banks/financial institutions to submit periodic stock audit reports.
Organizations wanting an independent review of stock management.
Why It Matters
Stock audits ensure:
Accuracy of inventory records vs. physical stock.
Correct valuation of stock for loan/security purposes.
Prevention of pilferage, wastage, and fraud.
Compliance with banking and financial covenants.
Process of Stock Audit
Physical verification of inventory at warehouses/factories.
Checking purchase, sales, and stock registers.
Verification of valuation methods (FIFO, Weighted Avg, etc.).
Reconciliation with financial statements.
Submission of audit report to company & lender.
Penalty / Risks of Non-Compliance
Wrong stock reporting may lead to loan recall, penal interest, or reduced credit limits.
Inaccurate records may trigger tax scrutiny.
How Law to Corporate (LTC) Helps
Independent stock verification and valuation.
Preparing bank-compliant stock audit reports.
Advisory to improve inventory management & reporting