Physical Verification of Assets – Guide Well International

Physical Verification of Assets

Avoid risks, conduct a physical verification of assets today

Physical verification of assets is an essential process conducted by auditors to confirm the actual existence of an entity’s assets. Businesses should perform this verification at the end of each financial year to maintain accurate records. Our verification approach involves a thorough, line-by-line reconciliation of fixed asset accounting records with the assets identified during the physical inventory process.

We have a dedicated team of associates and supervisors operating across India and internationally. To ensure smooth execution in remote locations, we deploy a specialized team adaptable to local languages and regional requirements.

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Objective of Physical Verification of Assets:

It is a statutory compliance as per CARO 2016
Ensures existence of assets of an entity
Facilitates valuation and rectification for any accounting discrepancy
To manage internal compliances of the entity
Critical for continuous customer service

This requires objective assessment of ledger contents and internal controls that support asset management. The process includes:

Automated comparison of asset tag and serial numbers.
Automated and manual comparison of manufacturer model numbers.
Comparison of additional available information such as description, location and department are taken into consideration.
An effort to address potential matches by description, manufacturer, model and serial number that may appear elsewhere in each record entry.
Allocation of bulk entries and grouped assets to the individual assets (computer equipment, furniture, manufacturing equipment, etc.)
Follow-up visits as necessary to verify any residual assets and / or gather additional information.
Creation of audit trail for linking the reconciled inventory file with the existing fixed asset accounting records.

At the closure of the verification, we provide an audit trail in an excel spreadsheet along with several specific reconciliation reports such as matched assets, unrecorded additions and unrecorded retirements.

Our team of experts will:

Consolidate physical report for all sites and assets / inventories
Perform reconciliation between physical count and book count
Compute difference and identifying the reasons
Provide Physical Verification Report
Physical Verification of Inventory

FAQs

1. How do you physically verify an asset?

Physical verification or observations of fixed assets are referring to the same procedure being used by auditors to verify the existence and condition of assets. Auditors also need to review the counting procedures from before count, during the count, and after the count.

2. What are the objects of verification of assets?

The object of verification is to satisfy the auditor as to existence, ownership, possession (in case of assets) or completeness (in case of liabilities), valuation and disclosure of items mentioned in the balance sheet

3. What is the purpose for verification of assets?

To find out the ownership and title of the assets.
To find out whether assets were in existence.
To maintain internal compliances of the entity
To detect frauds and errors, if any.
To find out whether there is an adequate internal control regarding acquisition, utilization and disposal of assets.

4. What are the asset audit techniques for physical verification?

Following are the asset audit techniques:

Asset Physical Existence
Purchase Asset for Business
Asset Ownership
Correct Asset Evaluation

5. What services we offer under physical verification?

We assist you with consolidate physical report for all sites and assets / inventories, perform reconciliation between physical count and book count, compute difference and identifying the reasons, executive Summary (signed off by Technical, SCM, Finance, MAS), provide Physical Verification Report and provide physical Verification of assets/ inventory.