Detail work on stocks - audit of current assets, Auditing

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Detail work on stocks - Audit of Current Assets

Detail work on stocks is imperative in an audit, since there are other review tests that are equally important and these include:

a) Quantity reconciliation of changes in stocks at successive period ends along with records of movements that are issues and receipts.

b) Comparison of quantities of every kind of stock held in one year end along with those held on a previous year end and the related issues and receipts.

c) The gross profit ratio is compared to that of the previous year, other companies and budget.

d) Review of rate of stock turnover along with previous year.

e) Comparison of stock pictures and budgets for stocks, purchases and sales.

f) Consideration of standard costing records, the treatment of variances in such the valuation of work and stocks in progress.


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