Physical verification of assets is a process undertaken by auditors to make sure that the assets of a business actually exist. This process must be completed by all businesses at the closing of each fiscal year. Our method of verification involves comparing the assets discovered during the physical inventory-taking procedure to the accounting records for fixed assets, line by line.
Purpose of physical verification of assets:
- Comply with statutory requirements.
- Guarantee the existence of an entity’s assets.
- Make it easier to value and correct any accounting disparity.
- Oversee the organization’s internal compliances.
- Essential for ongoing client support.
To do this, an evaluation of the ledger’s contents and the internal controls supporting asset management is needed. The procedure consists of:
- Automated comparison of serial numbers and asset tags.
- Manufacturer model numbers are compared both manually and automatically.
- Comparing other information that is readily available is taken into account, like the department, location, and description.
- An attempt to address possible matches by manufacturer, model, serial number, and description that might be included in any other part of the record entry.
- Allocation of bundled assets and bulk entries among the individual assets (such as computers, furniture, and manufacturing equipment).
- Follow-up visits to confirm the existence of any remaining assets and/or get more data.
- Establishing an audit trail to connect the current fixed asset accounting records with the reconciled inventory file.
