To ensure that the financial statements fairly and accurately reflect the information contained therein, it is important that the information contained in it correctly reflects the actual picture of the financial condition of the enterprise. In order to illustrate such important articles, such as commodity material values, it is necessary that the enterprise regularly carry out inventory. Which implies comparisons of the commodity material value balances in accounting reports with the actual commodity material value balances. Between the actual commodity material values and the data contained in the accounting records, there are often significant differences, and there may be many reasons that cause it.
Why does an enterprise need to conduct an inventory?
1. As stated in the standard, in the financial decision-making process it is important for the interested parties that accounting information about the exact picture of the data is done. Therefore, for example, for management it is important to know the actual information about the actual commodity material values at the enterprise. All interested parties have their reasons for the above article.
2. As it is known to many, the regulatory authorities often conduct an unexpected check; in particular, the tax control department checks the balance of the actual commodity material values of the enterprise through inventory. As a result of the above-mentioned tax audit if there is a difference between the actual commodity material values balances and the commodity material values balances in the accounting reports, the enterprise is subjected to a large number of fines.