Any organization, no matter of size or industry, knowing how to audit the fixed audits can help to reduce duplication and waste, theft and the loss; track depreciation accurately; and eliminate fraud, among other noted benefits.
Here are the Benefits of an Asset Audit
Knowing about audit of fixed assets and routinely conducting those audits helps to confirm the following:
- The physical existence of asset
- classification of Assets.
- Location of asset
- Date of asset purchase
- Original cost of the asset
- Proper labeling of asset with its assigned asset barcode/ID number
- That asset in good working condition
- Quantities of fixed asset
- Controls to prevent unauthorized access to the fixed assets
- If revalued, details of the revaluation
- Rate of depreciation
- Accumulated depreciation
- Depreciation for current year
- Particulars about the scrap
A fixed asset audit is a systematic process used by the organizations to verify existence, condition, location, and value of fixed assets.
Fixed assets are long-term, assets that any business or organization owns and uses to generate their income.
Thesetype of assets typically include items like buildings, machinery, equipment,land, vehicles, and office furnishings.
Step-by-step guide on how to conduct ixed asset audit:
1. Planning:
2. Asset Register Review:
.3. Physical Verification
4. Asset Tagging Labeling
5. Data Collection
6. Valuation
7. Reconciliation
8. Documentation
9. Reporting
10. Corrective Actions
11. Monitoring and Compliance
Fixed asset audit helps an organization to maintain accurate financial records, reduce risk of asset loss or theft, and also improve financial transparency and compliance with the accounting and tax regulations. It is critical process for maintaining integrity of an organization’s financial and asset management
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