Internal / statutory audit — end-to-end FAR review
Fixed Asset Audit Checklist
A practical checklist covering planning through reporting. Use alongside your firm's methodology and SA requirements.
1. Planning
- Understand entity's FAR process, systems (Excel / FAR software / ERP) and controls.
- Identify material locations, categories and related parties.
- Set materiality and sample sizes for additions, disposals and PV.
- Request FAR, TB mapping, depreciation policy, PV calendar and Capex tracker.
2. Completeness & accuracy of register
- Agree opening balances to prior year audited FAR / schedules.
- Test roll-forward: Opening + Additions − Disposals = Closing.
- Scan for duplicates, blank codes, negative costs and missing useful lives.
- Match capital purchases in P&L / creditors to FAR additions.
3. Valuation & depreciation
- Review capitalisation policy (cost elements, borrowing costs, ITC treatment).
- Test Companies Act depreciation (Schedule II lives / SLM or WDV).
- Where dual books maintained, test Income Tax block WDV separately.
- Recalculate deferred tax on temporary differences if in scope.
4. Rights, obligations & disclosures
- Confirm encumbrances, hypothecation and charges on fixed assets.
- Review PPE note, CWIP ageing, title-deed disclosures and Capex commitments.
- Check related-party asset transactions and managerial remuneration linkages.
5. Physical verification & IT assets
- Evaluate PV programme design and operating effectiveness.
- Attend / reperform verification at selected locations.
- For IT assets: reconcile serials / endpoint reports to FAR where available.
- Follow up unresolved exceptions to final adjustment or disclosure.
6. Conclusion
- Summarise misstatements (factual / projected) and discuss with management.
- Update CARO / SA 230 documentation.
- Issue management letter points on control gaps (tagging, PV, dual depreciation).
Prepared by: ______________________
Date: ______________________
Reviewed by: ______________________
Engagement: ______________________