Stock audit reconciles physical and book inventory
Inventory-heavy businesses need periodic checks of quantity, valuation, ageing, movement records and controls over receipts and issues.
Situations this page is built for
- Inventory value is material.
- Warehouse shortages or dead stock are suspected.
- Bank or lender requires stock statement verification.
- ERP stock differs from physical stock.
- Business needs inventory control improvement.
Documents and details usually required
- Trial balance, ledgers and financial statements.
- Bank statements, confirmations and reconciliation statements.
- Sales, purchases, payroll, expense and statutory dues data.
- GST, TDS, PF/ESI and income tax filing records.
- Fixed asset register, inventory details and loan confirmations.
- Board minutes, agreements and previous audit reports where applicable.
Practical process before hiring
Confirm audit scope
Identify entity type, audit requirement, reporting period, deadlines and certification needs.
Prepare books
Complete accounting, schedules and reconciliations before auditor review.
Perform audit checks
Review balances, controls, compliance, samples and supporting evidence.
Close observations
Resolve queries, finalise financials and issue/report filings where required.
What to expect in India
| Work type | Typical price range | Timeline |
|---|---|---|
| Applicability or scope review | Rs. 1,500 - Rs. 7,500 | 1-3 days |
| Small entity audit | Rs. 15,000 - Rs. 75,000 | 7-20 days |
| Complex audit or multi-location work | Rs. 75,000+ | Case-specific |
Prices vary by document readiness, urgency, city, professional experience and whether previous periods need cleanup.
Common red flags and mistakes
- Treating audit as last-minute signature work.
- Starting before books are reconciled.
- Not preserving confirmations and schedules.
- Confusing tax audit, statutory audit and internal audit.
- Ignoring audit observations after report completion.
What to mention when you post
- Entity type, turnover and financial year.
- Audit type and deadline.
- Whether books are final or need cleanup.
- Previous year audit remarks, if any.
- Whether ROC/tax filing support is also needed.
How to choose the right professional
- Confirm qualification and signing/certification scope.
- Ask for document checklist before starting.
- Clarify whether accounting cleanup is included.
- Check experience with your entity type and industry.
- Insist on timeline and query resolution process.
Extra checks before you finalise
- Before audit work starts, ask for a query list format and owner for each pending document so delays are visible.
- Confirm whether the engagement covers only review/reporting or also correction entries, schedules and management responses.
- For businesses with inventory, loans or statutory dues, insist on separate schedules because these are common sources of audit observations.
Questions people ask before hiring
What is checked in stock audit?
Physical stock, records, valuation, ageing, movement and controls.
Is stock audit only for banks?
No, businesses also use it for internal control.
How is valuation checked?
Auditor reviews cost method, records and supporting data.
Can it be done monthly?
Yes, frequency depends on inventory risk.