Independent verification, not self-reported counts
Stock Audit Services
Independent inventory verification, often required by lenders or as part of year-end audit procedures — an actual physical count against your accounting records, not a self-reported figure a bank has no independent way of verifying.
One of the most commonly overstated figures on a UAE SME balance sheet
Key facts
| Common trigger | Bank financing requirement, year-end audit procedure, or suspected shrinkage |
| Method | Physical count reconciled against inventory records |
| Output | Findings report highlighting any discrepancy and its likely cause |
What this actually involves
Banks specifically require independent stock audits for asset-based lending because self-reported inventory is one of the easiest balance sheet figures to overstate, whether through simple error, outdated records, or more deliberate inflation to support a larger loan request — an independent physical count removes that uncertainty from the lender's risk assessment.
Beyond financing, stock audits form a routine part of year-end audit procedures for inventory-heavy businesses, and are also a valuable diagnostic on their own when shrinkage (theft, damage, administrative error) is suspected but not yet quantified. A proper count, reconciled precisely against the accounting system's recorded value, surfaces the actual gap rather than an estimate.
Where a discrepancy is found, the value isn't just in reporting the number — it's in identifying the likely cause, whether that's a specific location with poor controls, a particular product category prone to damage or miscounting, or a systemic recording error that's been compounding undetected for some time.
Is this actually relevant to you?
- Your bank has requested an independent stock audit as part of an asset-based financing application
- Your year-end audit requires independent inventory verification as part of standard procedures
- You suspect inventory shrinkage but haven't quantified it through an actual physical count
- You want periodic independent assurance on inventory accuracy beyond your own internal counts
Our process, step by step
Count planning
Scheduling and scoping the physical count to minimise disruption to ongoing operations.
Physical inventory count
Independent count conducted at your premises or warehouse, following a defined methodology.
Reconciliation against records
Comparing the physical count precisely to your accounting system's recorded inventory value.
Discrepancy investigation
Where a gap is found, identifying likely cause — not just reporting the number.
Scope of work
Stock counts support the inventory figure in your IFRS financial statements and statutory audit, and sit naturally alongside fixed asset verification.
The most common causes behind a stock audit finding
- A specific warehouse location or product category with weaker physical controls than the rest of the operation, disproportionately driving the overall discrepancy.
- A systemic recording error (incorrect unit of measure, a miscounted receiving process) compounding quietly over multiple periods before detection.
- Genuine shrinkage from theft or damage that's never been formally quantified, only assumed or estimated.
Related audit services in Dubai and the UAE
Statutory, internal and specialist audits by our licensed audit practice.
Related guides from our team
Practical explanations of the rules behind this service, written by our chartered accountants.
Common questions
Why would a bank require an independent stock audit?+
Because self-reported inventory is one of the easiest figures to overstate on a balance sheet — an independent count gives the lender confidence the collateral value backing an asset-based loan is real.
How often should we run a stock audit?+
Annually at minimum for inventory-heavy businesses, or whenever a financing application or suspected shrinkage specifically warrants an ad hoc count.
Does a stock audit disrupt normal operations?+
It's planned to minimise disruption, though a full physical count inevitably requires some operational pause or careful scheduling around business hours.
What happens if the audit finds a significant discrepancy?+
We investigate the likely cause and provide a findings report — the next steps depend on whether it points to a control gap, a recording error, or genuine loss requiring further action.
Can stock audits be done across multiple warehouse locations?+
Yes, for businesses with inventory spread across several locations, a coordinated count across all sites gives a complete and accurate picture.
Need an independent stock audit for financing or year-end purposes?
Tell us your inventory location and approximate volume — we'll scope the count and turnaround time.