diff --git a/erpnext/stock/report/incorrect_serial_and_batch_bundle/test_incorrect_serial_and_batch_bundle.py b/erpnext/stock/report/incorrect_serial_and_batch_bundle/test_incorrect_serial_and_batch_bundle.py
new file mode 100644
index 00000000000..86f32077bea
--- /dev/null
+++ b/erpnext/stock/report/incorrect_serial_and_batch_bundle/test_incorrect_serial_and_batch_bundle.py
@@ -0,0 +1,83 @@
+# Copyright (c) 2026, Frappe Technologies Pvt. Ltd. and Contributors
+# See license.txt
+
+import frappe
+
+from erpnext.stock.doctype.item.test_item import make_item
+from erpnext.stock.doctype.stock_entry.stock_entry_utils import make_stock_entry
+from erpnext.stock.report.incorrect_serial_and_batch_bundle.incorrect_serial_and_batch_bundle import (
+	execute,
+)
+from erpnext.tests.utils import ERPNextTestSuite
+
+
+class TestIncorrectSerialAndBatchBundle(ERPNextTestSuite):
+	def run_report(self, **extra):
+		filters = frappe._dict({"company": "_Test Company"})
+		filters.update(extra)
+		return execute(filters)[1]
+
+	def test_healthy_bundles_not_flagged(self):
+		batch_item = make_item(
+			properties={
+				"is_stock_item": 1,
+				"has_batch_no": 1,
+				"create_new_batch": 1,
+				"batch_number_series": "ISBB-.#####",
+			}
+		).name
+		serial_item = "_Test Serialized Item With Series"
+
+		make_stock_entry(
+			item_code=batch_item,
+			qty=10,
+			rate=100,
+			to_warehouse="Stores - _TC",
+			posting_date="2026-06-01",
+		)
+		make_stock_entry(
+			item_code=serial_item,
+			qty=3,
+			rate=100,
+			to_warehouse="Stores - _TC",
+			posting_date="2026-06-01",
+		)
+
+		data = self.run_report()
+
+		bundles = frappe.get_all(
+			"Serial and Batch Bundle",
+			filters={"item_code": ["in", [batch_item, serial_item]]},
+			pluck="name",
+		)
+
+		flagged_names = {row.get("name") for row in data}
+		self.assertFalse(
+			flagged_names.intersection(bundles),
+			msg="Healthy serial/batch bundles should not be flagged as incorrect.",
+		)
+
+	def test_unlinked_bundle_is_flagged(self):
+		# an actual incorrect state: a submitted Serial and Batch Bundle left without any linking
+		# Stock Ledger Entry (e.g. the SLE was purged but the bundle survived)
+		batch_item = make_item(
+			properties={
+				"is_stock_item": 1,
+				"has_batch_no": 1,
+				"create_new_batch": 1,
+				"batch_number_series": "ISBB-ORPHAN-.#####",
+			}
+		).name
+
+		entry = make_stock_entry(
+			item_code=batch_item, qty=5, rate=100, to_warehouse="Stores - _TC", posting_date="2026-06-01"
+		)
+		bundle = frappe.db.get_value("Serial and Batch Bundle", {"voucher_no": entry.name}, "name")
+		self.assertTrue(bundle)
+
+		# orphan the bundle: drop the Stock Ledger Entry that referenced it
+		frappe.db.delete("Stock Ledger Entry", {"serial_and_batch_bundle": bundle})
+
+		flagged = {row.get("name"): row for row in self.run_report()}
+		self.assertIn(bundle, flagged)
+		self.assertEqual(flagged[bundle]["is_cancelled"], 0)