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Retail trade is the final stage of commodity circulation, trade in goods and provision of services to customers for cash.
In a broad sense, a retail audit is a regular study that is carried out directly at the point of sale and allows you to track the volume of product markets, brand shares, distribution, retail prices, inventory and many other important indicators.
The analysis of retail audit companies in India helps to trace the development and trends of individual parameters of the retail market and also provides the most complete and adequate characterization of the state and market development in general.
A retail audit is an effective tool for monitoring changes in a company’s position in the market and the activities of competitors, which allows you to develop options for solving the company’s problems related to the marketing mix.
If we talk about conducting a retail audit of a particular trading enterprise, then in this case the study is aimed at the business operations of the audited entity.
The cycle of sales, income generation and the formation of financial results at retail enterprises covers a variety of business operations, the largest share of which is occupied by those related to the sale of goods to consumers.
The economic processes of this cycle play the main role in the formation of the results of the economic activity of a trading enterprise, they are the initial basis for calculating taxes, etc., and therefore, their reliability is very important. This circumstance is determined by the main purpose of audit activity.
The purpose of the audit of retail sales is to establish the reliability of the reflection in the accounting and reporting system of transactions for the sale of goods and the compliance of the rules for conducting these transactions with the requirements of the current legislation.
The objectives of the audit of the sale of goods by retailers are:
- verification of documents confirming the transfer of ownership of goods from the seller to the buyer (a retail sale agreement is considered concluded from the moment the seller issues a cash register, sales receipt or other document confirming payment for the goods to the buyer);
- checking the correctness of settlements with buyers for the goods sold;
- control of compliance with the legislation in terms of the use of cash registers in settlements with customers;
- checking the correspondence of the reflection in the accounting of operations for the sale of goods, the correctness of determining the proceeds from sales and the amount of VAT and excise taxes to be transferred to the budget;
- checking the correctness of writing off sales costs as expenses of the reporting period for compliance with the organization’s accounting policy and the requirements of current legislation;
- control over the reliability of determining the financial result from the sale of goods.
For a successful audit of the cycle in question, the Retail audit companies take an idea of the nature and characteristics of the markets for goods by an economic entity, the competitive situation in these markets, and the solvency of consumers.
When checking the implementation cycle, the auditor, on the one hand, has internal sources of evidence (information received from the client in writing or orally). On the other hand, external (information received from a third party in writing), as well as mixed sources of evidence (information, received from the client in writing or orally and confirmed by a third party in writing, for example, confirmation of the amount of receivables).