Audit of the accounts of stores and inventories has been developed as a part of expenditure audit with reference to the duties and responsibilities entrusted to C&AG.

Audit is conducted with an objective of checking the Regulations governing purchase, receipt and issue, custody, sale and inventory taking of stores are well devised and properly carried out. 

The audit of the purchase of stores is conducted in the same manner as an audit of expenditure. The auditor has to ensure that the prices paid, quantity, quality is reasonable as per the terms of an agreement.

An auditor has to check the details of correctness and accuracy of receipts, issues and balances.

Any excess or idle inventory is specifically mentioned in the report and periodical verification of inventory is also conducted to ensure their existence.

The valuation of the inventories has to see carefully so that the value accounts tally with the physical accounts and that adjustment of profits or losses due to revaluation, inventory-taking or other causes is carried out.