Fixed asset audits are conducted to ensure that an entity’s fixed assets are properly recorded, classified, and valued in accordance with accounting standards and the entity’s policies. The audit aims to verify the existence of fixed assets and ensure that they have been capitalized correctly. The completeness and accuracy of fixed asset registers and records are also examined, along with the compliance of accounting standards and guidance notes.
Depreciation calculations are checked to ensure they are consistent with the applicable framework or statute. The audit also ensures that disposals of fixed assets and any impairments are accounted for correctly.
Fixed asset audits are essential to prepare accurate financial statements and to ensure regulatory compliance with laws such as the Income Tax Act 1961, CARO, and Schedule II and III in case of companies. Moreover, these audits provide better internal control, which helps the company to identify and rectify errors or omissions in accounting and capitalization of fixed assets.
Qualified Chartered Accountants and experienced professionals conduct fixed asset audits, adhering to generally accepted auditing principles.