Stock Audit Services

Stock audit involves the independent physical verification and valuation of inventory held by a business, cross-checked against stock records and, where relevant, the drawing power statements submitted to lenders. Banks routinely require periodic stock audits for borrowers availing working capital facilities against inventory and receivables, but the exercise is equally valuable as an internal control measure for any business carrying significant stock.

Why This Matters

Inventory is one of the easiest balance sheet items to overstate, whether through outdated records, slow-moving stock carried at full value, or genuine discrepancies between what the books show and what is actually on the shelves. For lenders, an inflated stock statement means collateral cover that does not really exist. For business owners, it means working capital decisions and profitability numbers built on inaccurate information. An independent stock audit brings the figures back in line with physical reality and protects both financiers and management from decisions based on false comfort.

How We Help

Physical Verification of Inventory

We carry out on-site counts of raw materials, work-in-progress, and finished goods, using appropriate sampling or full-count methods depending on the nature and volume of stock, and document the process for audit trail purposes.

Valuation and Ageing Analysis

We review the valuation methodology applied to inventory, checking for consistency with accounting policy, and identify slow-moving, obsolete, or near-expiry stock that may need provisioning or write-down.

Reconciliation with Books and Drawing Power

We reconcile physically verified stock with the quantities and values reported in books of account and in drawing power or stock statements submitted to banks, highlighting variances and their likely causes.

Godown and Storage Compliance Review

Where inventory is pledged or hypothecated to a lender, we assess storage conditions, access controls, and insurance coverage at godowns and warehouses to confirm that security arrangements match what has been represented.

Who Needs This

• Borrowers with working capital or cash credit facilities secured against stock
• Traders, distributors, and manufacturers carrying significant inventory
• Banks and NBFCs commissioning periodic stock audits of borrower accounts
• Businesses seeking to strengthen internal inventory controls

Our Approach

We combine physical verification with a critical review of documentation, so the audit goes beyond a simple count to test whether reported figures can be substantiated end to end. Reports are prepared in the format expected by banks and lenders where applicable, while also giving business owners a clear, practical picture of where their inventory records need tightening.

Get in Touch

To discuss how we can support you with stock audit services, write to us at info@agarwalurs.com.