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FIXED ASSET AUDIT CHECKLIST
Comments arising out of the audit of Fixed Assets are as below:
"S.No.".
CHECK INTERNAL CONTROL MEASURES
Ensure the Following:
1 All tangible and intangible fxed assets are adequately saeguarded
2
3
4
5 Regular reiew o adequate se!urity arrange"ents
# $here should be a %eriodi! ins%e!tion o assets&
' Regular reiew o insuran!e !oer require"ents oer fxed assets&
( All "oe"ents in fxed assets are a!!urately re!orded&
)
1*
11
12 +btain written authorisation or s!ra%%ing,dis%osal or sale o fxed assets&
13
14
15 All additions and dis%osal are !orre!tly re!orded&
1#
1' -o!u"ents o dis%osal should be !he!.ed by inde%endent %erson&
1( /he!. !al!ulation o %roft,loss on dis%osal&
1) /o"%any should "aintain a list o title or all landed %ro%erties and buildings&
2*
All do!u"ents o title should be held in a se!ure %la!e with adequate !ontroloer re"oal and re%la!e"ent&
0ritten authority should be obtained ora -e!laration regarding fxed asset s!ra%%ed&b elling a fxed asset
A re%ort "ust be %re%ared and issued in res%e!t o !a%ital assetssold,s!ra%%ed or transerred&
Register o fxed assets should be "aintained and re!on!iled to %hysi!al
ins%e!tion o fxed asset and to no"inal ledger&e%arate register should be "aintained or hired assets leased asset and
6ointly owned assets&
Additions to fxed assets register "ust be erifed and !he!.ed by authorised%erson&
%e!ial !are should be ta.en i assets are sold or dis%osed o7 to dire!tors sta7or other related %arties&
/ontinuity !he!.s should be "aintained oer fxed asset dis%osal andadditions&
Full %ro!edure should be %res!ribed or the %ur!hase o new fxed assets
in!luding written authority wor. order ou!her and other releant eiden!e&
e%arately re!ord should be "aintained or the %lant "a!hinery et!& used bythe !o"%any but owned by the others&
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21
22 Assets are %ro%erly insured&
23
24
25 8ew assets a!quired during the year should also be !oered by %oli!ies&
2# /he!. the basis ado%ted or the insuran!e&
2'
2( All assets are !orre!tly de%re!iated and re!orded at written down alue&
2) 9ns%e!t %hysi!ally and note !onditions and use o asset&
3* /ontrols to %reent oer de%re!iation o ully de%re!iated assets&
31
32 Regular reiew o usage or wear and tear and its e7e!t on asset lie&33 9n!ase o !a%ital ex%enditure !he!. authorisation li"it&
34
35
3# Re!ords o su!h fxed assets should be regular written u% throughout the year&
3'
FIX THE OBJECTIVES OF AUDIT
9nternal Audit o $angible and 9ntangible fxed assets inole the ollowing ob6e!A
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E
VERIFY THE EXISTENCE/ACCOUNTING OF ALL ASSETS
1
2
3
/he!. that all obsolete and da"aged ite"s are stru!. o7 ro" the re!ords andfnan!ial a!!ounts&
Ensure that ollowing ris.s li.e ;ood fre earthqua.e and riot are !oered bya%%ro%riate insuran!e %oli!ies in res%e!t o %lant and "a!hinerybuilding et!&
9 insuran!e !oer is not %roided !he!. that other "easures are ta.en by the"anage"ent&
s a!tiities andhae ownershi% title are a!!ounted or&
Ensure that %ro%er re!ords o fxed assets in!luding ully de%re!iated assetsare "aintained&
/he!. that ex%enditure su!h as re%airs renewals "aintenan!e do not in!ludeany "aterial ex%enditure on asset&
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4
5
#
VERIFY LAND AND BUILDING
1 ?eriy %ro%erties and relate the" to the %lan !ontained in the title deeds&
2
3
4
5
#
' Exa"ine bill o !ontra!tors and ar!hite!ts to eriy the alue&
(
VERIFY OTHER ASSETS
1
2
3
4
5
#
'
(
/he!. rental and hire ex%enditure a!!ounts or ensuring that fnan!e leasehae been !a%italised&
Ensure that all new additions during the year are in!luded and assets sold ordis!arded o7 are ex!luded&
Re!on!iliation o Fixed asset register to %hysi!al ins%e!tion o fxed assets and
to no"inal ledger&
/he!. a!quisition and dis%osal o land and building with "inute boo.s andother aailable eiden!e& Any !hange "ust be s!rutini@ed&
All de!isions regarding a!quisition or dis%osal o any asset re!orded in oard"inutes "ust be re!orded in a!!ounting re!ords&
9n !ase o leasehold land auditor should see the !ertif!ate o registration otitle&?eriy the !ost with reeren!e to do!u"ents and ensure that lease should be
written o7 oer the year as the alue di"inishes&uilding "ay be %ur!hased or !onstru!ted& 9 !onstru!ted auditor should seethat all ex%enses on wages "aterial et!& are debited to uilding a!!ount&
9 building is %ur!hased auditor should ou!h the %ay"ents and ensure that!oneyan!e deed is registered and su!h registration !harges legal !hargeset!& are also debited to the building a!!ount&
9ns%e!t %hysi!ally all re!orded ite"s o %lant and equi%"ent fttings tools andequi%"ents and "otor ehi!le et!& and re!on!ile the" with no"inalledger&
A!quisition o new fxed assets and i"%roe"ents to the existing ones shouldbe erifed ro" su%%orting do!u"ents e&g& orders inoi!esre!eiingre%ortand title deeds et!&
el=!onstru!ted fxed assets and !a%ital wor.=in=%rogress should be erifedwith the !ontra!tors> bills& 0or.=order re!ords and inde%endent !onfr"ation othe wor. %eror"ed&
9n!ase o fxed assets destroyed s!ra%%ed or sold ensure thata retire"ents hae been %ro%erly ad6ustedb +n sale o assets any resulting %roft or losses hae been %ro%erlyad6usted and dis!losed in %roft and loss a!!ount&
!rutinise any assets destroyed s!ra%%ed or sold during the year but notre!orded&Exa"ination o "a6or additions to as!ertain whether they re%resent additional!a%a!ity or re%la!e"ent o old asset&
9 ne!essary obtain a !ertif!ate ro" exe!utie that all assets destroyed orsold hae been re!orded in the boo.s&
Ensure that the "ethod o erif!ation was reasonable in the !ir!u"stan!esrelating to ea!h asset&
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)
VERIFY INTANGIBLE ASSETS
1
2
3 /he!. !ertif!ate o registration and renewal or %atent and trade"ar.s&
4 Exa"ine that !onditions i"%osed by agree"ents hae been !o"%lied with&
5
#
'
( ?eriy the existen!e o %ur!hased goodwill with %ur!hase agree"ents&) Reiew "inutes o board or eiden!e o additions and dis%osals&
1*
11
12
13 /he!. %ast %eriods> re!ords or assessing a!!ura!y o %reious ore!asting&
14
VERIFY VALUATION/DISCLOSURE REQUIREMENTS
1
2
3
4
5 /he!. the %ro!eeds o dis%osal o assets with !ash boo. and sales inoi!es&
#
'
$est !he!. the boo.s re!orded o fxed assets with the %hysi!al erif!ationre%orts&
$hese assets hae no %hysi!al existen!e su!h as goodwill %atentstrade"ar.s !o%yrights tenan!y rights et!&
?eriy do!u"entary eiden!e su!h as %atent li!ensing agree"ents writtenassign"ent&
/he!. that goodwill should be written o7 out o annual !urrent %rofts within areasonable %eriod&
?alue o the !o%yright should be exa"ined eery year& Ensure that assetsshould be dis!losed at !ost less a"ount written o7 ro" ti"e to ti"e&
9n !ase o trade"ar.s and %atent rights ensure that all ex%enses o !reationgeneration and registration o right should be !a%italised&
/he!. the a!!ounting %oli!ies ado%ted or intangible assets and note down thedetails in the %er"anent fle&
Ensure that a"orti@ation %oli!y and the a"ounts at whi!h assets are re!ordedare !orre!t and adequate&
9n !ase o !onstru!tion o new %ro6e!t reiew the "anage"ent %lans and"ar.eting ore!asts to as!ertain whether ne!essary fnan!e will be aailable ornot&
Reiew the !ir!u"stan!es o a!tors a7e!ting the alue o intangibles su!h as!hange in "ar.et %la!e o%eration o law li!ensing agree"ents et!&
Ensure that tangible and intangible fxed assets are alued at a%%ro%riatealue !onsistent with the %reious year&
Ensure that fxed assets hae been alued and dis!losed in the fnan!ialstate"ents a!!ording to generally a!!e%ted bases o a!!ounting and%reailing%ra!ti!es&Ensure that additions "ade during the year are san!tioned ro" "inutes and!a%ital ex%enditure budget&
/he!. that assets on whi!h subsidy is granted are %ro%erly a!!ounted or anddis!arded se%arately&
/he!. additions ro" and dis%osal to dire!tors and related %arties and s%e!if!dis!losure should be "ade o that a!t&
9 any asset is owned 6ointly with others exa"ine the releant do!u"ents su!has title deeds agree"ents et!& to as!ertain fr">s shareo su!h assets&
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(
)
1* /he!. that inor"ation su%%lied to aluer is !orre!t and reasonable&
11
12
13
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15
DEPRECIATION
1
2
3
4 !alls or the ollowing dis!losure require"ents:a ross and net boo. alue o fxed assets at the beginning and end o ana!!ounting %eriod showing additions dis%osal a!quisition and other"oe"entsb Ex%enditure in!urred on a!!ount o fxed assets in the !ourse o!onstru!tion or a!quisition and! Realued a"ount substituted or histori!al !osts o fxed assets the"ethod ado%ted to !o"%ute the realued a"ounts the nature o indi!es use
the year o any a%%raisal "ade and whether an external aluer was inoledin !ase where fxed assets are stated at realued a"ounts&
Ensure that !harge or yearly de%re!iation and balan!e o a!!u"ulatedde%re!iation are reasonable haing regard to ex%e!ted useul lie andresidualalue&Ensure that de%re!iation !harge or the year is reasonable in relation to thea!!e%ted %oli!ies o the %reious years and boo. alue o the fxed assets&
Reiew the leels o %rofts and losses on dis%osal and assess the adequa!y ode%re!iation rates&
8ote the te!hnologi!al !hanges and re%la!e"ent %oli!y o the !o"%anyhistory o %rofts,losses on dis%osal o any asset&
/onsider o a s%e!ial de%re!iation rate or assets used on loss "a.ing %rodu!tsno longer in use due to abnor"al use obsoles!en!e %hysi!al deterioration&
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1* 9n!ase lease %re"iu"s are !a%italised !he!. whether %art o the %re"iu" bewritten o7 oer the %eriod&
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Include in
REPOR ! REPOR REPOR #
ASSERTIONS
OMPLETENES XISTENC CCURAC ALUATIO ISCLOSURE
/ E ?
E
/ E A ?
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E
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E A
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/ E
/ E
8/17/2019 Fixed Asset Veification
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/ E
/ E ?
/ E ?
A ? -
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A ?
A ?
A ? -
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A ?
A ? -
/ A ?/ A ?
/ E
A ? -
/ E -
-
ties:/ E A ?
A ?
A ?
-
A ?
/ E
/ E -
A ?
8/17/2019 Fixed Asset Veification
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A ?
/ E
/ E A ?
/ E
/ E
A ?
/ E
A ?
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A ?
A ?
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/ E A ?
A ?
E A ?
A ? -
A ? -
A ? -
A ?
8/17/2019 Fixed Asset Veification
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/ E
/ E
/ E
/ E
/ E
A ?
A ?
A ?
/ E/ E
-
A ?
A ?
A ?
/ E
/ A ?
/ E A ? -
/ E
/ E A ? -
E A ?
A ? -
/ E A ? -
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A ?
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E
A ?
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A ?
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