Preparation for Bank Stock Audit – Using Finsys ERP Software

Preparation for Bank Stock Audit – Using Finsys ERP Software


What Is Stock Audit? Why Is It Done and What Are the Stock Audit Processes?

Source :  Click here


Theory Part 1 :

Stock Audit is an Important Process regularly undertaken by Banks. This Examination is meant to assure the Bank that all is well. Assuring that the Inventory Numbers being reported to the bank are Correct.


Theory Part 2 :

The Bank gives Credit Limits to your company, against the PRIME security of your Stock and Debtors… This means that, if you default on your loan repayment, they feel assured that they can take over your stocks and then sell it. They can theoretically use that money to cover the loan given to you. So the Stock audit is done to regularly assure the bankers that the stock is correct and genuine.


Theory Part 3 :

Now for the above the specific Purpose is to see that

  1. Stock Quantities reported are Correct
  2. Price / Rates are correct
  3. Calculation is correct
  4. Stock is not obsolete
  5. Stock is not non moving

The stock audit process is necessary to reduce the avoidable investment on stocks or inventory to ensure proper balance in the process. As high levels of stock result in overstocking which may result in the poor value of cash flows and financial losses.

The auditor’s task is to check the statements during the process of examination. If he/she comes across with any fraud or discrepancy by the management of the company, then the auditor should mention those in his report.  But, the auditor cannot presume that management of the company might have committed fraud. But he must be cautious


Reports to take from /finsys ERP

RAW MATERIAL : CLOSING STOCK .. Use any Closing Stock valuation report

preferably that shows Item name, Rate, Qnty, Amount and also Location … this helps in random audit

 

 


FINISHED GOODS: CLOSING STOCK ..

Use any FINISHED GOODS Closing Stock valuation report

preferably that shows Item name, Rate, Qnty, Amount and also Location … this helps in random audit

Note : FG should not be valued at Sale price, but at cost. Different methods are there.


Your goods lying at your OSP – Out side parties… Job Workers

take its value from the ERP


Value of WIP

 


Value of Customer Material lying with you

this is to be excluded in stock reports

 


Value of Customer rejections


Value of Supplier Rejections

 


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