Fixed assets are an essential part of the assets of any company. It is with the use of fixed assets that the main production activity of any company is connected, because OSs are the basis of the production process. In order to prevent any violations in accounting for fixed assets, an audit of operations with fixed assets is carried out.
What does this type of audit include? The audit of operations with fixed assets includes the verification of all documents that are acquired by the enterprise, are in the process of use, on which depreciation charges are accrued, and which are sold after the end of their service life at a cost referred to as residual.
In order to audit operations with fixed assets, it is necessary to verify the following criteria:
1. The existence of OS objects for which verification is carried out - for this it is necessary to inventory those OS objects that are subject to verification. In fact, the inventory is a personal check by the auditor of the presence of all OS objects displayed in the documents. If any objects of the operating system do not really exist, or they are not in the same state as described, the auditor should make appropriate notes in the working documents and present them in conclusion.
2. Ownership of fixed assets located in the enterprise - at this stage, the auditor must determine whether the fixed assets are actually owned by the company, and whether it has the right to fully dispose of them. As a rule, this happens in connection with checking payment for purchased OS assets, therefore, after checking the OS, it often becomes necessary to audit cash transactions.
3. Evaluation. In order for the OS check to be complete and its results show a complete picture of the state of the enterprise, it is necessary to find out whether all OS objects are correctly evaluated. In addition to assessing the initial value of fixed assets and determining their residual value, which will be the selling price of fixed assets after the end of use, this item also includes depreciation, or, as it is also called, depreciation, which is a regular charge to a special reserve created for in order to be able to subsequently acquire new operating systems in exchange for already used ones.
Since the value of fixed assets, as a rule, is the largest part of the assets of the enterprise, this means that it is precisely due to fixed assets that the bulk of the property of the company is formed, and hence its value. The value of the company is reflected in the value of its shares. That is why it is necessary to understand that identified inconsistencies in the OS may entail the need to audit securities transactions
In general, checking the status of operations with the operating system is an important moment in the life of any enterprise, as it enables management to imagine a holistic picture of what is happening with the operating system. Audit of operations with fixed assets is one of the most important tools to maintain a stable financial condition of the company, as it does not allow it to get into trouble due to incorrect assessment and depreciation on the operating system. This audit is not carried out as often as other types of audit. But in order to maintain the state of the enterprise at the optimum point, it is recommended to audit operations with fixed assets at least every three years.
We hope that reading this article will help young accountants and auditors to deal with such a difficult issue as checking the status of transactions with the OS at the enterprise, and convince company managers of the need for regular checks of this type.