Most of the Organizations emphasize on Fixed assets as it constitutes of major investments. Also, as an Internal Audit department almost every Chief Internal Audit includes fixed asset audit in every annual internal audit plan. In this post I will share you 10 important checkpoints that you must cover in your Fixed asset audit. You can obviously add N no. of checkpoints in your Fixed asset audit checklist. In this article I am focusing only on few most important points. Also, these points are common all across the industries and there are obviously few industry specific checkpoints on fixed assets as well. You can include this Fixed asset audit checklist in both internal and external (Statutory) audits. Do comment below if you think we can make it more interesting and readable.

1. Logical Access of Fixed asset management application: logical access means right person should have right access to use the application if any application is involved in fixed asset management. You can ask auditee for access dump.
2. Depreciation and Amortization and Impairment: This is the most basic checkpoint in every fixed asset audit. You must read relevant regulation and law before doing this audit. Basically, you can check rates and useful life of an asset along with accuracy of depreciation.
3. Capitalization and de-capitalization: Fixed assets are capitalized when they are put to use and depreciation is charged according to that only. Some companies also have process of decapitalization of assets which need to be checked
4. Physical Verification: Physical verification is another important aspect one should check while doing audit of fixed assets. Either you can conduct physical verification on sample basis by yourself or you can rely upon fixed asset verification done by company in past by verifying report.
5. Process and procedures (SOP). So, most basic starting point of any internal audit is to check their Standard Operating procedures and other policies. Same you can include in your fixed asset audit checklist and check whether they have been followed or not.
6. Segregation of duties: Segregation of audit can be seen as having proper control over each kind of risk. Every companies have few segregations of duties among various process
7. Reconciliations: You can do or check various reconciliations between FAR and GLs or FAR vs IT assets records with IT department. In short you must reconcile every data you get from the company.
8. Disposal of fixed asset: disposal of fixed asset or we can say sale of scrap is  also important from auditor prospective as you have to see whether company is disposing unutilized assets. You can ask ageing of unutilized fixed asset from the company as well.
9. Fixed asset procurement: So another big area is procurement of fixed asset. You can do replica of check points of procurement audit to check process of procurement of fixed asset is as per policy and procedures
10. Indian accounting standard (INDAS): You can check applicability of IndAS as well, whether organization is following GAAP or not in fixed asset management.

There are only some basic checklist of fixed asset audit and you can add N no. of checkpoints basis the industry and type of organization. If you face any kind of problem while conducting your fixed asset audit then you can mail me @ [email protected] . I will definitely try to help you out and will guide in performing some checkpoints as well.