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audit of stock

Jain Anshulika (19 Points)

24 September 2018

how can I audit loss of stock due to theft except the declaration made by proprietor.

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6 Replies

Kanika khetan (Sr. Associate) (331 Points)
Replied 25 September 2018

The difference in closing stock calculations can give you an indication. As you calculate closing stock using trial balance (using sale, purchase and opening stock) you can get an estimate of stock lost by difference in actual and estimated stock.

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Jain Anshulika (19 Points)
Replied 26 September 2018

agree but is this enough

Kanika khetan (Sr. Associate) (331 Points)
Replied 27 September 2018

In case this gives to satisfactory assurance for your opinion, I think this can be enough

Kanika khetan (Sr. Associate) (331 Points)
Replied 27 September 2018

In case this gives to satisfactory assurance for your opinion, I think this can be enough

Abhay (Partner) (2 Points)
Replied 22 July 2021

Following process can be adopted

1 Check FIR Lodged in police department

2 check Insurance claim made by proprietor and verify the insurance company's enquiry document.

Both will give you prima facie evidence on which you can rely absolutely

If not available

3 enquiry with employee who work there to reverify the owner's claim

4 perform arthematical calculation with physical inventory if possible

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debora M (BUSINESS DEVELOPMENT MANAGER) (1697 Points)
Replied 03 September 2021

Losses are entered in the inventory asset account as a credit. A debit entry must be made in an expense account; it's called a write-down of inventory account or loss of inventory account.

The entire amount of stolen cash is deducted from owner's equity. Create a theft expense account on the income statement. Record the entire amount of stolen cash as a theft expense and/or the net amount of assets less accumulated depreciation.