Automating the Fixed Asset Audit

Automating the Fixed Asset Audit Ten Commonly Performed Tests Summary The process of auditing fixed asset records in an enterprise that can be daunting, especially when the number of supporting detail records is in the thousands or tens of thousands, which is not an unusual situation. Two general audit approaches can be used: sampling, or 100% testing of the records using automated procedures. This article describes the latter approach, using three different software tools. For each tool, the steps needed to accomplish each of the audit objectives are described. These tools were selected for the article as they are the most familiar to the author. However, a similar approach can be used with almost any other audit software tool. The data for testing All of the audit tests were performed using data fabricated for this article for the mythical “ABC Corp” and consist of approximately 5,000 detail records. These detail records are the supporting detail for the fixed assets located at 12 physical locations, and operated by the three organizational units within the ABC Corp. Why perform automated testing? One of the key advantages of using an automated approach for audit testing is that any of the so called “impossible conditions” can be tested for. Examples include asset costs with credit balances, acquisition dates in the next century, depreciable lives of less than one year, etc. etc. Even though these situations should rarely be ...