Auditing Fixed Assets and Inventory

Course overview

Course outline

1. 1Day One: Risks and Planning for Asset Audits

   • Types of fixed assets and inventory and their risks
   • Accounting principles for assets and inventory in overview
   • Key controls across the asset and inventory life cycle
   • Understanding systems, registers and warehouse processes
   • Risk assessment and scoping of the audit
   • Planning site visits and data requests
   • Exercise: building a risk and control matrix
2. 2Day Two: Capital Expenditure and Asset Registers

   • Capital budgeting and approval of capital projects
   • Capitalisation policy and distinguishing capital from revenue
   • Asset register completeness and accuracy
   • Asset tagging, location and custodian records
   • Physical verification and reconciliation to the ledger
   • Assets under construction and project transfers
   • Exercise: testing a sample asset register
3. 3Day Three: Depreciation, Impairment and Disposal

   • Depreciation methods, useful lives and residual values
   • Recalculating depreciation and identifying errors
   • Indicators of impairment and impairment reviews
   • Asset transfers between locations and entities
   • Disposal approval, valuation and proceeds
   • Write-offs, scrapping and donation of assets
   • Case study: misappropriation through disposal processes
4. 4Day Four: Inventory Controls and Stock Counts

   • Receiving, inspection and recording of goods
   • Storage security, access and segregation of duties
   • Issues, transfers and returns controls
   • Planning, observing and testing stock counts
   • Cycle counting programmes and their effectiveness
   • Investigating and approving count differences
   • Exercise: planning and observing a stock count
5. 5Day Five: Valuation, Analytics and Reporting

   • Inventory costing methods and valuation checks
   • Slow-moving, obsolete and damaged stock provisions
   • Analytics for stock ageing, turnover and anomalies
   • Identifying unused and underutilised assets
   • Writing findings that reduce loss and improve utilisation
   • Agreeing management actions and follow-up
   • Personal action plan for asset and inventory auditing