Physical Verification

Fixed Asset/inventory physical verification involves physically inspecting and confirming the presence, whereabouts, condition, and quantity of an organization's fixed assets. This process acts as a deterrent to asset misappropriation and minimizes the risk of financial loss and fraud. Regular physical verification helps organizations in identifying the inconsistencies between the assets recorded and the assets physically verified.

Engaging an independent party for physical verification ensures that the procedures are performed independently and offers several other benefits:-

• Accuracy: It ensures that the fixed asset register/inventory records are up-to-date and accurate by confirming the existence and condition of assets.
• Preventive check: Regular physical verification helps to detect discrepancies (between quantities in books and physical records) on timely basis.
• Compliance: compliance with reporting guidelines is ensured.
• Risk Management:Identifying discrepancies helps organisations to take appropriate course of action and ensure that such miss outs, if any, are explained and well documented.
• Asset's effective utilisation:By identifying if assets are obsolete assets during verification, organizations can make informed decisions with respect to assets disposal, assets replacement etc.
• Insurance coverage:appropriate updated records helps to ensure that assets are adequately insured, mitigating the chance of underinsurance.