What is a Fixed Assets Audit?
A Fixed Assets Audit is the formal process of recording a business’s long-term resources, primarily those used to generate income. Examples include land, buildings, equipment, office furniture/fixtures, and vehicles. Asset audits are performed by asset accountants and/or independent asset auditors who present the findings in an asset report.
This article features: 1) what a fixed assets audit is; 2) top 5 reasons to perform fixed assets audits; 3) a mobile app to help perform fixed assets auditing; 4) free digital auditing templates you can download, customize, and use
Click here to download free & customizable Fixed Assets Audit Templates
Top 5 Reasons to Perform Regular Fixed Assets Audits
Aside from asset auditing being closely connected with the legal obligation of tax reporting, businesses have much to gain from performing asset audits regularly. Below are some of the reasons why businesses should routinely audit their fixed assets:
- To verify accuracy of financial records
Regardless of company size, businesses are legally obligated to submit tax reports. Regular audits gives businesses updated valuations of their long-term resources, essential to writing accurate tax reports, avoiding legal issues, and hefty fines. Additionally, having an accurate snapshot of the business’s financial status can help make budgeting for the future easier.
- To avoid ghost assets
Ghost assets are fixed assets that appear on a company’s ledger, but are either physically missing, or rendered useless and inoperable. Ghost assets, however, still contribute to a company’s tax obligations and insurance payables even if they do nothing to increase profits. Performing fixed assets audits on a schedule can help businesses identify and eliminate ghost assets with greater regularity in order to avoid needless spending and improve overall cash flow.
- To eliminate internal fraud
A business that fails to perform fixed assets audits on a regular basis becomes much more susceptible to internal fraud. Employees, managers, or other personnel could take advantage of the lack of oversight and asset misappropriation can become a problem.
- To provide assurance to shareholders
Not all shareholders hold top management positions which means they don’t always have immediate access to the company’s figures. Regular audits and subsequent reporting can help assure shareholders of the company’s good standing, in turn encouraging their continued support as investors.
- To enchance the company's credibility for prospective buyers
If the owner is planning on selling the company in the near future, regular audits can help ensure the accuracy and reliability of the figures to be presented to potential buyers.
Easy-to-use mobile asset auditing app
Asset reports can be troublesome to put together, considering that most businesses still do them on paper. It is important that fixed assets are physically verified and documented as evidence of their existence and utility, and accomplishing this manually involves numerous steps. iAuditor, the world’s #1 auditing app makes fixed asset auditing easier, faster, and practical:
- ✓ Download ready-to-use asset auditing templates for free and get started right away, customize pre-made templates, or create new ones entirely through our easy drag-and-drop template builder
- ✓ Take photos and annotate them as evidence for the existence and utility of fixed assets
- ✓Schedule and assign audits to asset auditors and they will be notified via email and/or push notification to ensure they are not missed
- ✓ Assign corrective actions on the spot for issues that need resolving. Set the time, date, and priority level for corrective tasks.
- ✓ Automatic syncing between mobile devices and desktop platform provide real-time analytics dashboards. Get visibility into your compliance, data accuracy, and more.
- ✓ Include the auditor’s digital signature to ensure validity and accountability
- ✓ After the audit is complete, an instant shareable report is automatically generated.
Try iAuditor Fixed Assets Auditing App for Free
Mobile-ready fixed assets auditing templates
This template can be used by in-house fixed assets accountants and third-party auditors to ensure that the business is maintaining proper records of fixed assets, depreciation of fixed assets are properly calculated, and accounting standards are complied with.
This checklist can be used by fixed assets auditors as a stand-alone self-evaluation tool, or as a preparatory document when developing a compliance tracker. Check if the organization has an updated record of fixed assets, if the asset are reviewed on a regular basis, and if they are stored securely when not in use.
This template can be used when creating a list of real property items. Indicate item costs, date of purchase, and the current market value for each item from all areas of the property. Evaluate the quality of each item and take a photo using a mobile device, iPad, or tablet. Share your audits to your managers or supervisors and generate real time reports while on-site.
This checklist can be used to create a basic list of your stocks. Add items by using iAuditor’s Dynamic Fields which allows you to ask recurring questions. Record the labels or product numbers. Capture photos of the products. List the quantity and net value. Complete the audit by confirming the total number of inventory items and value. Affix a digital signature to validate your audit. Save your reports via iAuditor’s cloud-based storage (unlimited photos and memory via Premium subscription) and generate reports anytime with the touch of a button.