The matter listed below are always included in the internal control of a firm. You are required to explain the purpose of each of the items listed as below. Indicate the compliance tests you would carry out in order to ensure that the intended controls were operating properly. A rule that a fixed asset register must be maintained and updated promptly

The purpose of requiring that a fixed assets register must be maintained and promptly updated:

A fixed assets register provides details of all the assets of the company, the location, serial identification number, person who has custody, cost, depreciation policy and the net book value among other details. This register serves the following purposes:

  • Ensures that there proper records showing all the purchases and disposals of fixed assets
    i.e. all the movements in the fixed assets are accounted for;
  •  Makes it easy to physically verify the existence of the assets. By using the register one can be able to trace the location of the assets;
  •  Increases accountability over the usage of the assets because all the assets are under assigned specific persons who control their usage;
  •  Reconciling the fixed assets register to the ledger ensures completeness and
    accuracy of the fixed assets balances in the ledger.
    Tests over the operation of this control
  • Inspecting the register to confirm that it is updated with all the assets movements and reconciles to the general ledger;
  • Inspecting the register to verify that a senior responsible person reviews the register on a regular basis to ensure completeness and accuracy.

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