AS-2 Inventory Valuation Audit — FIFO/Weighted Average Validation

Overview

AS-2 Inventory Valuation Audit examines whether the value assigned to stock in your books is correctly computed as per AS 2 (Valuation of Inventories) or Ind AS 2, which require inventory to be valued at the lower of cost and net realisable value (NRV). Conducted through exported costing sheets and system valuation reports, the review checks the costing method used — FIFO, weighted average, or specific identification — and validates it against the figures actually applied in the accounting system. Valuation errors are one of the most common reasons inventory figures get questioned during statutory audit or tax assessment, since overvalued or undervalued stock directly distorts reported profit, and this remote review is designed specifically to catch configuration and application errors that a purely physical stock count would never reveal.