Exercise 1 - jb nagar cpe study circle of wirc of icai

Audit ChecklistFrom CARO ChecklistSL.NO.InventoryPARTICULARSYES/NO/N.A REMARKS1 Whether physical verification of inventory has been conducted, atreasonable intervals, by the management?2 Whether the procedures of physical verification of inventoryfollowed by the management is reasonable and adequate inrelation to the size of the company and nature of its business? Ifnot the inadequacies in such changes to be reported?3 Whether the company is maintaining proper records of inventory?4 Whether any material discrepancies were noticed on suchverification? If so has it been properly dealt with in the books ofaccounts?From Co. Act ChecklistNoneFrom Corporate Governance ChecklistNoneDisclosure Requirements Under Schedule VIInventories are to be classified under the following heads• Stores and spare parts• Loose tools• Stock in Trade• Work in progressMode of valuation of stocks including WIP shall be stated and the amount in respect of rawmaterial shall also be stated separately where ever practicable.In case of the manufacturing companies, the value of raw material consumed giving item wisebreak up and indicating the quantities thereof has to be reported as part of notes on accounts. Inthis break up as far as possible all important basic raw materials shall be shown as separateitems.Intermediaries or components procured from other manufacturers may, if the list is too large to beincluded in the break up, be grouped under suitable headings without mentioning the quantities,18 Rakesh Agarwal