What Is a Fixed Asset Audit?

A fixed asset audit is a review - internal or by external auditors - that checks whether the fixed assets an organisation claims to own physically exist, are correctly valued, and match what the asset register and the accounts show. Fixed assets (buildings, machinery, vehicles, IT equipment, furniture) often make up a large share of the balance sheet, so misstated assets mean misstated accounts. The audit is the periodic test; audit readiness is the year-round habit of being able to pass it without a scramble.

What auditors check

• Existence - assets on the books are real, present, and identifiable.
• Completeness - assets in use are on the books; nothing material is missing from the records.
• Valuation - purchase cost is supported by invoices, depreciation follows the stated policy and useful lives, and impaired or obsolete assets have been written down.
• Rights and ownership - the organisation owns what it claims, with leased and loaned equipment classified correctly.
• Disposals - retired assets were removed from the books with approval and documentation, not merely from the building.

The two-direction test

The fieldwork classic is sampling in both directions. Sheet-to-floor: the auditor picks entries from the register and asks to be shown the items - this tests existence, and is where ghost assets surface (recorded items that were disposed of, lost, or stolen without the books being told). Floor-to-sheet: the auditor picks items they can see and asks for their records - this tests completeness, and is where unregistered purchases and untagged equipment surface. An estate that passes one direction can comfortably fail the other, which is why both are run.

How to prepare before auditors arrive

• Run your own verification pass first and reconcile the differences, so the auditor’s sample finds what your records promise.
• Make sure every sampled item can be found quickly - tagged, with a current location and a named custodian in the register.
• Have purchase invoices, warranty documents, and disposal records attached to or traceable from each asset record.
• Check that depreciation schedules agree between the register and the ledger, and that fully-depreciated items still in use are flagged rather than forgotten.
• Be ready to show history: when an auditor asks “who has had this laptop and when was it last serviced”, the answer should be a lookup, not an investigation.

Strong internal controls do most of this preparation implicitly - if disposals require approval and write-offs are made by someone other than the record-keeper, the records tend to arrive at audit season already clean. That separation is segregation of duties doing its quiet work.

Common audit findings

The recurring ones: ghost assets still accruing depreciation; equipment physically present but never capitalised or registered; disposals with no paperwork; assets with no identifiable custodian; transfers between sites that the records never followed; and registers kept in spreadsheets where history cannot be evidenced because any cell can be silently rewritten.

Fixed asset audits in practice

Audits reward unglamorous habits - tag at purchase, record disposals the day they happen, keep documents on the record, verify on a schedule. Teams that keep their register in AMPthilly walk into an audit with purchase details, attached invoices, named custodians, and a full per-asset audit history exportable to CSV, which covers most of what an auditor asks to see. The same discipline applies beyond finance: security-driven reviews under ISO 27001 ask near-identical existence and ownership questions about an information asset register.

Related terms

• Audit Readiness - the year-round state of being able to pass without a scramble
• Internal Controls - the process checks auditors test alongside the assets
• Segregation of Duties - keeping custody, record-keeping, and approval in separate hands
• ISO 27001 Asset Management - the infosec counterpart to financial asset audits
• Information Asset Register - the register of data and information assets auditors may also review