07 February 2010
Audit procedure for physical verification of Fixed Assets
- Obtain the list of fixed assets lying in the organisation according to management. In that list, name of the fixed assets with model no. to identify or some times some identification mark, quantity and exact location to identify in which department it is lying.
- Take this list for physical verification, if found short specify next to it and if found in addition den also.
- Get that signed by the person with whom you are physically verifying and also mention the date and try to find the reason for it.
- Try to make out the financial effect from the assets not found during the physical verification.
- Report to management in case of internal audit and in case of statutory audit, book in embezzlement.
- First of all, obtain the list of contracts (AMC) and get signed by the management for your working papers so that in future management will not say that you have missed that AMC
- On test check basis, select some AMC and obtain the copy of contract.
- Carefully study the clauses of AMC and check whether the expenses booked according to clauses of AMC.
- Check whether the TDS @ 2% as applicable in case of contractors if PAN no. is obtained or 20% in case of the specified contractor does not provide the PAN no has been deducted or not??
- Is the expenditure booked in addition to amount specified in contract?? If yes, obtain the revised copy of contract otherwise report to management
- Deposit of TDS deducted on it
- Bifurcation of amount into the expenditure to be booked and prepaid expenese if the period specified in the contract exceed the year ended.
- Booking of AMC in accurate head i.e. have to see according to expenditure
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