Asset Auditing
Fixed asset verification involves lining up of all the assets specifying the places about where the assets are held and the ones responsible for the possession. In the realm of business operations and financial management, the accurate assessment and verification of physical assets stand as crucial pillars. Physical assets represent a substantial portion of a company’s value, and their proper verification is indispensable for ensuring the integrity of financial statements, compliance with regulations, risk management, and overall operational efficiency.
Our Services for Asset Management
Complete Audit Solution & Automation
If you looking for automation using RFID, barcode or beacon to automate the process for audit of your asset, we can suggest a professional solution to automate your FAR report and actual assets. It involves the following process
- Identify the category of assets
- Define locations
- Define Technology to be used
- Tagging
- Automation
- FAR Register Comparison
- Final Report
- Improvement Areas
- Certified by CA
Asset Outsourcing
If you are looking to outsource your complete asset management for better management. We can help you to reduce cost and wastage
- Dedicated resource
- Free Software
- Weekly & Monthly Report
- Free Management for Consumables
- Improvement Areas
- Reduce Waste Management
- Asset Allocation Strategy
- Financial year report
Only Physical Verifcation
If you looking for only verification of your asset, we can deliver professional service to compare your FAR report and actual report. It involves the following process
- Identify the category of assets
- Define locations
- Collect existing data
- Tagging
- Comparison
- Final Report
Our Services for Auditing
Complete Audit Solution & Automation
- Identify the category of assets
- Define locations
- Define Technology to be used
- Tagging
- Automation
- FAR Register Comparison
- Final Report
- Improvement Areas
- Certified by CA
Asset Outsourcing
- Dedicated resource
- Free Software
- Weekly & Monthly Report
- Free Management for Consumables
- Improvement Areas
- Reduce Waste Management
- Asset Allocation Strategy
- Financial year report
Only Physical Verifcation
- Identify the category of assets
- Define locations
- Collect existing data
- Tagging
- Comparison
- Final Report
Our Services for Auditing
Complete Audit Solution & Automation
- Identify the category of assets
- Define locations
- Define Technology to be used
- Tagging
- Automation
- FAR Register Comparison
- Final Report
- Improvement Areas
- Certified by CA
Asset Outsourcing
- Dedicated resource
- Free Software
- Weekly & Monthly Report
- Free Management for Consumables
- Improvement Areas
- Reduce Waste Management
- Asset Allocation Strategy
- Financial year report
Only Physical Verifcation
- Identify the category of assets
- Define locations
- Collect existing data
- Tagging
- Comparison
- Final Report
Ensuring Accuracy and Integrity: The Significance of Physical Asset Verification
In the realm of business operations and financial management, the accurate assessment and verification of physical assets stand as crucial pillars. Physical assets represent a substantial portion of a company’s value, and their proper verification is indispensable for ensuring the integrity of financial statements, compliance with regulations, risk management, and overall operational efficiency
Importance of Physical Asset Verification
1. Financial Accuracy:
Accurate financial reporting heavily relies on the precise valuation of physical assets. From machinery and equipment to property and inventory, these tangible assets impact the balance sheet and influence crucial financial ratios. Any discrepancies in their valuation can misrepresent the financial health of an organization, leading to misguided decisions.
2. Compliance and Regulations:
Adherence to regulatory requirements necessitates proper verification of assets. Various industry standards and accounting principles mandate the consistent assessment and reporting of assets. Failure to comply can lead to legal repercussions and tarnish a company's reputation.
3. Risk Management:
Regular verification acts as a preventive measure against potential fraud, theft, or misappropriation of assets. Identifying discrepancies promptly aids in mitigating risks associated with asset mismanagement or loss.
4. Operational Efficiency:
Accurate asset records streamline operational processes. Detailed knowledge of asset location, condition, and quantity aids in planning maintenance, replacement, or utilization, thereby enhancing overall operational efficiency.
Methods of Physical Asset Verification
1. Physical Audits: Conducting physical inspections and counts of assets is a primary method. This involves teams physically locating, identifying, and documenting assets to ensure alignment with records.
2. Technology Integration: Utilizing technology such as barcode scanners, RFID (Radio-Frequency Identification), or asset tracking software streamlines the verification process. These tools enhance accuracy, speed, and accessibility of asset data.
3. Tagging and Labeling: Assigning unique identification tags or labels to assets simplifies tracking and verification. Barcodes, QR codes, or RFID tags enable easy scanning and updating of asset records.
4. Data Reconciliation: Regular reconciliation of physical counts with existing records helps in identifying discrepancies. Discrepancies can be investigated to rectify errors and maintain accuracy.
Challenges and Solutions
1. Scale and Complexity: For large organizations with numerous assets across multiple locations, maintaining an accurate asset registry can be challenging. Employing specialized teams, leveraging technology, and implementing standardized procedures can address these challenges.
2. Human Error: Manual data entry and human oversight during audits can lead to errors. Training personnel, employing validation checks, and using automated systems can minimize these errors.
3. Technological Integration: Implementing new technology or software requires adaptation and training. A phased approach to implementation and continuous training can smoothen this transition.
In conclusion, physical asset verification stands as a cornerstone of financial transparency, regulatory compliance, risk mitigation, and operational efficiency for organizations. Employing robust verification methods, leveraging technology, and fostering a culture of accuracy and accountability are imperative in ensuring the integrity of an organization’s asset base.
What is Asset Auditing?
Physical asset auditing is needed for:
Asset auditing is a physical verification process. Comparing an organization’s “official list” of assets to the actual assets physically located. By conducting this audit you are confirming that the assets listed on an organization’s balance sheet are real (or exist physically) or NOT.
Establishing the existence and location of an organization’s assets, and evaluating their condition is a crucial business task for small and large organizations. It’s mandatory compliance.
Fixed asset verification involves lining up of all the assets specifying the places about where the assets are held and the ones responsible for the possession.
Assets can move locations, get reassigned to other people, get replaced, etc. Accounting needs accurate data for tracking inventory and calculating depreciation.
Whether your assets are fixed or movable, they can be managed much more efficiently in a paper-free environment. Auditing fixed assets are extremely important to ensure that accounting for capital assets and depreciation is in compliance with the management’s objectives.
- Cost optimization
- Ensure business discipline
- ESOP
- Merger or Acquisition
- Public Listing
- Compliance requirement (OCC Regulation 12 CFR 9, Clause 4(i) of CARO, IT ACT 2008, Section 16AB of the Audit Act 1994-Melbourne
- Best Practices
- ISO 27001:2013 Asset handling an
How Asset Auditing help?
First It will give an actual picture of Asset Valuation
A fixed asset audit identifies the assets that the company and current status of the assets. Because a fixed asset audit helps to prepare the accurate balance sheet. Hence it will ensure regulatory compliance. In addition to these fixed asset audits provides better internal control.
It also helps you identify unwanted assets lying in different locations, the asset which is depreciated to almost 0 but still in use. Assets that are lost or stolen.
Business is all about assets and risks. If the customer is an asset, then the competitor becomes a risk. Managing your assets means managing those risks
- What risks are the most critical to you?
- Do you look at production risks, investor risks or customer risks?
- What about health and safety, and environmental risks?
There are many risks related to asset management facing organisations today, with different probabilities and severity of outcomes. Often the implications of those risks are not fully understood.
If you are not able to operate your physical assets when needed, is it just lost revenue for the duration of the downtime? Or additional costs due to expedited deliveries? Or is the matter more severe, resulting in a permanently lost customer because of missed deliveries in a JIT (Just in Time) manufacturing environment? Customer issues related to quality or customer service can have similar outcomes.
The negative outcomes related to health and safety, and environmental violations have gotten much more severe. As well as the amount of the fines increasing for violations, more jurisdictions are imposing jail sentences for violations.
Other than this, all private and public entities are required to conduct an annual physical count of all fixed assets to verify actual assets in hand and value and ensure the accuracy of related financial records. One of the topics covered in the Final Asset Management Guide issued by the National Treasury is that a comprehensive Fixed Assets Register must be prepared. Once the Fixed Assets Register has been prepared, there is a need to continuously update with additions and disposals (maintaining a separate Disposal listing), the assets must be depreciated on an annual basis. More importantly, there is need to estimate the remaining useful lives and residual values of the assets on an annual basis at the bare minimum.
The fixed asset register shall be maintained in the format determined by the entity, which format shall comply with the requirements of any accounting requirements, which may be prescribed.