Objective Assessments of Inventory and Receivables
At Lekshmi N Iyer & Associates, we conduct Stock & Book Debt Audits to independently assess the accuracy of reported inventory and receivables. These audits help support informed decision-making by lenders, promoters, and management.
Our approach includes physical verification, valuation review, and documentation checks to identify gaps between reported figures and actual position—while ensuring alignment with applicable lender requirements, internal control policies, and industry norms.
Supporting businesses with inventory and credit exposure
Scope of Verification and Reporting
- Physical Inventory Verification
Site-level verification of quantity, condition, shelf life, and storage compliance. - Inventory Valuation & Movement Review
Assessment using valuation methods such as FIFO, LIFO, WDV, or NRV, based on entity policy and available documentation. - Receivable Validation & Aging Analysis
Examination of debtor balances, credit cycles, write-offs, and risk indicators. - Documentation Review
Validation of stock registers, GRNs, purchase orders, invoices, and dispatch notes. - Lender Format Compliance
Reporting aligned to bank or NBFC-prescribed templates and ratio requirements.
Reports may include executive summaries, control insights, and flagged inconsistencies, if any.
- Physical Inventory Verification
Why Independent Verification Adds Value
Overstatement of inventory or book debts can lead to mismatches in loan eligibility, asset valuation, or compliance disclosures. An independent audit enhances credibility by offering a realistic snapshot of available assets, with appropriate documentation and physical support.
From Record Review to On-Site Verification
- Scope Definition
Understand audit purpose—working capital, collateral verification, or internal review. - Data Collection & Reconciliation
Analyze inventory statements, debtors’ ledgers, and prior filings. - On-Site Physical Verification
Match stock counts and condition with records; trace debtors where relevant. - Control Testing & Review
Evaluate controls around stock handling, ageing, write-offs, and valuation.
Reporting & Recommendations
Submit detailed audit report along with management commentary and compliance notes.- Scope Definition
Why Stock & Book Debt Audit Matters
Loan Approval or Renewal
Lending institutions often require certified stock and receivable positions before sanctioning funds.
Working Capital Monitoring
Confirms actual availability of current assets for liquidity management.
Due Diligence Support
Validates reported assets during funding rounds or M&A evaluations
Inventory & Credit Risk Detection
Helps detect obsolescence, overstated balances, or control gaps in time.
Stock & Book Debt Audit FAQs
Common questions about income tax, compliance, and litigation support in India.
Is this audit mandatory?
While not legally mandated, many lenders require stock and book debt audits as a condition for working capital financing or loan renewals.
Can you coordinate with our bank for formats?
Yes, we can structure the report to match lender-prescribed formats, subject to professional independence and client consent.
Are physical visits required?
Yes. Physical stock verification is a key component of such audits and is typically conducted at business locations
How long does the audit take?
Duration depends on the volume of inventory, number of sites, and the complexity of receivable structures. Typically ranges from 5 to 10 working days.
