Stock audit is a comprehensive review and verification of a company’s physical inventory or stock levels, including raw materials, work-in-progress, and finished goods. It ensures accuracy in stock records, valuation, and compliance with accounting standards and regulatory requirements.

During a stock audit, auditors physically count and inspect inventory items, reconcile stock records with physical counts, and verify the accuracy of stock valuation methods. They also assess the adequacy of internal controls over stock management, identify discrepancies or irregularities, and recommend corrective actions to improve inventory control processes.

Stock audits help organizations prevent stock pilferage, shrinkage, or obsolescence, optimize inventory turnover, and accurately report stock values in financial statements. They also support decision-making related to stock replenishment, pricing, and inventory management strategies.