Stock Audit Report Format
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How to write / Sample / Template / Example of Stock Audit Report of Manufacturing
Companies Factory stock done by External Audit Firm - in India in excel/word/.doc/.xls with
covering letter
To,
Mr. Anil Kapoor,
M/s Rocket Sales Limited,
Mumbai
Subject: - Report on the Stock Audit of the factory at KHAPOLI of M/s ROCKET SALES
LIMITED, as on 10thOctober 2013.
Ref: - Appointment received from your good self dt. 11thJune 2013
Dear Sir,
We have carried out the Stock Audit of Khapoli Factory of M/s Rocket Sales Limited, as on 10.th
October 2013, according to the scope of work, guidelines, and audit program provided by you.
OurStocksAudit Report consists of:-
I. Audit Observations covering the audit programme.
II. Annexure supporting the Audit Observations.
The draft audit report was discussed in detail with Shri -------------------- (Sr. Manager, Accounts &
Commercial - Factory) and Shri ------------- (Manager, Dispatch -Factory), their comments on each of the
points are incorporated in the respective parts.
Thanking You,
For, ABC ASSOCIATES
Chartered Accountants
(SACHIN JAIN)
Place: Mumbai
Date: 24thOctober 2013
OBSERVATIONS ON THE STOCK AUDIT AS ON 10thOCT 2013
The Stock Audit was carried out counting each and every item lying in the finished goods.
godowns of the factory as on 10thOct’2013. The exercise continued for 18 days wherein all the
Incoming and dispatches of materials were considered while working out the exact stocks.
2. Following are the major observations:
Stocks in the godowns are not placed uniformly. There is no proper marking of the area.
in the warehouses for placing the stocks in particular grade-wise.
b. There is one godown named FG1 godown. Mostly stocks are in this godown.
taken as fresh in the book stocks, were observed in damaged and non-saleable
condition. The total value of the stocks in this godown is approximately Rs. 1200.00 lacs.
The unfinished stocks / stocks in process were found kept in the finished goods area.
d. Many of the stocks were found damaged due to being rust affected, especially in the
godown named FG1. The rain water was observed coming from the roof. The anti-rust
and dust repellent treatment had not been done, as explained to us. The stocks were
affected by cobweb and dust layers at many places.
e. No proper attention is given to the guidelines regarding the maintenance and safety of
the stocks.
f. The fire extinguishers were not installed as per the guidelines. Most of the fire
extinguishers were observed expired.
g. The physical verification of the stocks was not done at the factory level. Some HO
personnel came on 30th June 2013 and physically taken the stocks. Very rough working
sheets were provided to us regarding these stocks. Further, as explained and certified
to us, the variations observed during this physical verification were adjusted in the
books.
h. During our physical verification of the stocks, the following are the major details:-
S/n Particulars Book Stock Physical Variation
Stock (%)
1 Stocks physically found and - - -%
observed in books (---- items)
2 Stocks physically found but not 0 - -%
observed in books (---- items)
3 Total - - -%
-
The detailed working on the Book Stocks vs Physical Stocks (grade wise) are attached as
Annexure 'a'.
2. Summary of the Base Boards and Rejected Boards are attached as Annexure 'b'.
3. Details of the stocks kept in FG1 godown (almost non saleable) is given in Annexure 'c'.
4. The statement obtained from Mr. -------------------- (Senior Manager, Accounts & Commercial-
Factory) accepting our observations on stocks, are attached as Annexure 'd'.
In the end, we are thankful to the concerned personnel of the factory who have extended their
support during the audit exercise.
For ABC ASSOCIATES
CHARTERED ACCOUNTANTS
SACHIN JAIN
MUMBAI