The fixed asset auditing procedure is for those assets, which expected to last more than one year, such as land, buildings, and equipment. If you are not having updated record for your fixed assets. Fixed asset audit need to done once in a year. First of all ,fixed assets are the primary resource for the business. You need to get ready to pay thousands of dollars every year. In the meantime, it also increases the chance of misplacement, loss, and undocumented assets which affect the business. Additionally, the same will capture some of the important details like serial number, date of purchase.
Benefits of Fixed asset Audit
Fixed asset audit identifies the assets that the company and current status of the assets. Because fixed asset audit helps to prepare the accurate balance sheet. Hence it will ensure the regulatory compliance. In addition to these fixed asset audits provides better internal control.
Verification particulars of fixed asset audit
Fixed asset auditing procedure: 1.Records should contain information like Description of the asset, Classification, Location, Quantity, Original Cost, Date of Purchase, Details of revaluation, Rate of Depreciation, Accumulated Depreciation, Depreciation for the Current year and Particulars about scrap or sale
2.Description for manufacturer, serial number and model
3.Correct depreciation calculation
5.Documentation of asset movements
Fixed asset auditing procedure: Accounting procedures
The accounting procedure ensures the existence of assets in a company. Some common procedures were used to test the existence of different category assets while auditing. For example, buildings, equipment and other fixed assets existence will be tested through observation only. Probably this record is produced by the auditor while auditing.
Fixed asset auditing procedure :Depreciation
fixed assets reduce their value over time. Hence depreciation of fixed assets is used to allocate cost over their useful life. Every fixed asset has its own depreciation values apart from the land. These fixed assets are depreciated by using any one of the methods like written down value and straight-line method. Likewise, depreciation of the current accounting period will be calculated according to a fixed asset’s useful life, original cost, depreciation method, and local regulations.
IT Asset Management’s audit software Captures Fixed Assets information electronically such as Bar code number, Description, Location, Fixed Asset Classes, Departments and Cost Centers and Serial numbers. Therefore these electronically captured data helps keep track of the correct value of assets, which allows for the computation of depreciation and taxes. Fixed asset auditing procedure includes the use of bar-coding technology makes asset verification simple and efficient. With IT Asset Management, you can create any compliance reporting formats such as IFRS, GAAP Accounting or any other international jurisdiction compliance reports. Creation and Management of compliance reports have been simpler than ever before.
Also read. Compliance Management