Advisory — Fixed Assets
A scoped review in which Kiren & Co verifies that your fixed assets physically exist, are where the register says, and are in the condition it implies — investigates every discrepancy found, and documents the outcome for your management and, where relevant, for discussion with your auditor.
A fixed asset register can hold a location, a custodian and a condition for years without anyone confirming any of the three against the asset itself. The gap is usually invisible until someone asks — an auditor, or a controller who has just inherited the register and would rather know what is actually there. This engagement establishes what exists, where, and in what condition, and works through every discrepancy the count turns up.
The auditor asked how you verified these assets. You have a spreadsheet, and photographs on somebody’s phone.
Your register says the asset is in Plant 2. Nobody has physically confirmed that in years.
Last year’s count found items missing. Nobody can now say what was done about them.
Nobody commissions a verification review for its own sake. It usually arrives attached to one of these.
A question about how fixed assets were verified, or whether the interval between counts was reasonable. It arrives with a date attached.
Somebody has inherited the register and the assets it describes, and would rather know what is actually there before signing off on either.
An asset cannot be found and there is no documented trail of when it was last confirmed present, making the loss hard to explain or to claim against.
A count is due on the cycle your organisation runs — annual, half-yearly, quarterly, or a one-off exercise ahead of a specific event.
Physical existence, location and condition of the assets in scope, checked against what the register records. Custodian confirmation, where custodianship is part of what is being tested. Every discrepancy — an asset not found, an asset found but not in the register, or an asset found in a different location, under a different custodian, or in worse condition than recorded — investigated to a documented conclusion.
This review does not extend to reconciling the register against the general ledger, testing depreciation, or reviewing componentisation and capital work-in-progress — that is the scope of a fixed asset register review, and physical verification is included there where that engagement calls for it. Where verification is the only question in front of you, it can be scoped and run on its own, as described here.
The work is scoping, judgement and forming a view on what each discrepancy means. It is done by a chartered accountant, not produced by a tool.
Which locations, departments and asset classes are in scope, and on what cycle, agreed with you before anything starts.
Verification is carried out at the asset locations. Where you run the count yourselves, we set the scope and review the result; where we run it, we do so directly.
Not found, found but unrecorded, or matched but wrong on location, custodian or condition — each one investigated to a documented cause, not left as an unexplained line.
What was found, what it means, and what correcting it involves, written so it can be handed to your management or your auditor without translation.
Where the count is carried out using ProcureTrail, the system holds the campaign, the scan record and the photographic evidence — written once, hashed, with no edit or delete path. It records what was found, when, and by whom. It does not decide what a discrepancy means or what should be done about it — that is the judgement described above, and it is not required for this engagement. How the system fits together →
Written to be handed to somebody else — your management, or your auditor.
Scope, coverage, the outcome for each asset, the discrepancy register and how each discrepancy was resolved.
The supporting schedules behind the pack, organised by working area, for whoever needs to stand behind the number afterwards.
What was found, ranked by what it affects, and what correcting each point involves.
Each item that does not match is categorised — not found, found but not on the register, or found but recorded incorrectly — and moved through investigation to a documented conclusion. The record of that investigation is kept against the asset, not summarised away. Where a discrepancy points to a write-off, a register correction, or a question that only management can answer, that is set out as a recommendation; the decision, and the entry that follows from it, remain yours to make.
It is not a statutory audit, and no audit opinion or assurance conclusion is expressed on your fixed assets or your financial statements. The documentation produced may help management prepare evidence for discussion with its auditor; it does not itself determine compliance with CARO 2020, Clause 3(i), and whether a particular auditor accepts it is a matter between you and your auditor. It does not certify the existence or value of an asset beyond what was observed at the time of the count, and it does not extend to a valuation — where a technical assessment of value or remaining life is needed, that comes from your engineer or a registered valuer.
And it is not available to our own audit clients. Section 144 of the Companies Act 2013 lists services a statutory auditor may not provide to a company it audits, and the restriction extends to that company’s holding and subsidiary companies. We check that before we scope anything.
Organisations with a material fixed asset base who need to establish, on the record, that what the register shows still matches what exists. Finance teams running or preparing for a year-end verification cycle. Organisations whose last count and register have diverged, or who have never run a structured count at all. Organisations responding to a specific question from their auditor about how assets are verified. Multi-location organisations where a physical count is operationally difficult to organise consistently.
CA Kiren Kumar K, FCA, ICAI membership number 223478, of Kiren & Co, Chartered Accountants, Bengaluru, FRN 031392S. The work described here draws on eight years of statutory audit of asset-heavy entities — cement, aerospace, automotive, hydraulics, healthcare and cable distribution — and on three years of technical accounting and audit-reporting work. More about the practice →
No. ProcureTrail is a system this firm may use to run the campaign and hold the evidence. This is the professional engagement in which Kiren & Co scopes the work, carries out or oversees the verification, investigates what is found, and documents it. The engagement does not depend on the use of ProcureTrail.
Either. Physical verification is also included within a fixed asset register review where that engagement's scope calls for it. Where verification is the only question in front of you — an auditor has asked how the assets were verified, or a count is due — it can be scoped and run on its own.
No. Where the register itself is incomplete or unreliable, that is usually part of what the count reveals. What is found is recorded against what the register currently shows, and where the register needs rebuilding afterwards, that is separate, related work.
No. Section 144 of the Companies Act 2013 lists services a statutory auditor may not provide to a company it audits, and the restriction extends to that company's holding and subsidiary companies. If Kiren & Co holds your audit, or the audit of your holding or subsidiary company, we will tell you at the first conversation and we will not take the engagement.
The existing register if one exists, a list of locations and the people who can give access to them, and the audit observation or query letter, if that is what prompted the request.
Send the register, if one exists, and tell us what prompted the question. We will tell you what a scoped review would cover and whether it is what you need at all.