What is a fixed asset audit?
A fixed asset audit is a physical count of the equipment your business owns, checked against your asset register. It is also called a physical asset verification. The aim is to prove that each asset exists, is in the recorded place and is with the recorded person.
The accounting term for most of these assets is property, plant and equipment. The IFRS Foundation's summary of IAS 16 describes them as tangible items held for use in the business. They are expected to be used for more than one period.
This guide covers the physical side: the count, the reconciliation and the follow-up. How the results affect your financial statements is a question for your accountant or auditor.
Good asset tracking software makes each step faster, but the process matters more than the tool. A clean register and a disciplined count are what make the result reliable.
Why do asset registers drift from reality?
Registers drift because assets move every day and the paperwork does not always follow. A laptop goes to a new employee, a generator moves to another site, or a broken drill is thrown away. Each change is small, but over a year they add up.
Common causes include:
- Transfers between sites or people that nobody records.
- Disposals and scrapped items that stay on the register.
- New purchases that are used before they are registered.
- Shared tools with no named custodian.
- Descriptions so vague that two similar items cannot be told apart.
What do you need before you start a fixed asset audit?
You need a clean register, tagged assets, a location list and trained counting teams. Time spent preparing saves far more time during the count.
Each register line should hold at least an asset number, description, serial number, location, custodian and tag ID. If locations are vague, such as "head office", split them into rooms or areas first.
Pause asset moves between sites during the count where you can. If something must move, record the transfer so that it is not counted twice or missed.
How do you run a physical asset verification step by step?
Run the audit as a fixed sequence, so every site is counted the same way:
- Set the scope and the date. Decide which sites and asset classes are included, and pick a date for each location. Agree with finance which register date you are verifying against.
- Clean up the register. Export the register and remove duplicates. Make sure every asset has an asset number, description, serial number, location and custodian.
- Tag what is untagged. Fit a barcode or NFC tag to any asset that has none, and link the tag to its record. Do this before the count, not during it.
- Brief the teams and assign locations. Send teams of two to each location: one scans, one records. Where possible, the person counting should not be the asset's custodian.
- Count room by room. Work through each location in a fixed order. Scan every tagged asset, and record anything you find that is not on the register.
- Record condition and custody. Note whether each asset is working, damaged or out of use, and who has it. Get custodians to confirm the items in their care.
- Reconcile the results. Compare what was found with the register. Sort every difference into a result category, as in the table below.
- Investigate the differences. Search for missing items, check transfer and disposal records, and ask last known custodians. Give each open item an owner and a deadline.
- Update the register, with approval. Correct locations and custodians, add unrecorded assets and record approved write-offs. Keep a note of who approved each change.
- Report and follow up. Report the results per site to management and finance. Agree actions for repeat problems, such as a site that loses tools every quarter.
Counting in teams of two is a control, not just extra hands. One person cannot then quietly mark a missing item as found.
How do you reconcile missing and found assets?
You reconcile by sorting every difference between the count and the register into a clear category, each with its own action. This stops teams from making quick fixes, such as deleting missing items.
| Result | What it means | What to do |
|---|---|---|
| Found as recorded | Right asset, right place, right custodian | No change; the scan is your evidence |
| Found at a different location | The asset moved without a transfer record | Update the location and find out why the move was not recorded |
| Found with a different custodian | Someone else has the asset | Confirm with both people and update the custodian |
| Not found | The register says it exists, but nobody can find it | Search other sites, check disposals, ask the last custodian, then follow your loss procedure |
| Found but not on the register | An asset nobody recorded | Tag it, register it and check with finance how it was bought |
| Damaged or out of use | The asset exists but does not work | Flag it for repair or disposal and tell finance |
| Tag missing or unreadable | The asset is there, but the scan fails | Identify it by serial number and fit a new tag |
Agree with finance how long you search before an item is treated as lost. Write-offs and disposals should be approved by someone other than the person who counted.
How do you verify assets at remote sites and in the field?
You verify remote assets by scheduling them, not by hoping they turn up at head office. Vehicles, radios, generators on client sites and tools carried by field staff are the items most easily missed.
- List every asset that is off-site, with the site or person that has it.
- Ask custodians to scan their own items on a set day, and check a sample in person.
- If your system records the GPS location with each scan, compare it with the expected site.
- Record assets out for repair, with the repairer's name and job number.
- Log locked rooms and absent custodians, and book a return visit before you close the audit.
Self-scans by custodians are quicker, but they are weaker evidence than an independent count. Use them for low-value items, and visit high-value assets in person.
Who should be responsible for each asset?
Every asset should have one named custodian, whether a person or a site manager for shared equipment. Without a name, nobody is accountable when an item goes missing.
Portable items, such as tools, radios and laptops, need a check-out and check-in record. Fixed items, such as a generator, can sit with the site manager.
When an asset moves to another person or branch, record the transfer at the time. That turns the next audit from a search into a confirmation.
What does a fixed asset audit look like in practice?
Here is an illustrative example with a fictional company and round numbers. A facilities company has 600 registered assets across a head office and two depots.
- 570 assets are found as recorded.
- 12 are found at a different depot, with no transfer record.
- 8 cannot be found, mostly hand tools.
- 10 items are found that were never registered.
The 12 moved assets show that transfers are not being recorded, so that becomes the main action. The 8 missing tools go through the search and loss procedure. The 10 new items are tagged and registered.
What should a fixed asset audit checklist include?
A short checklist keeps every site to the same standard:
| Stage | Check |
|---|---|
| Before the count | Scope and dates agreed; register exported and cleaned; locations listed; untagged assets tagged; teams briefed; devices charged; asset moves paused. |
| During the count | Every room visited in order; every asset scanned; unrecorded items noted; condition and custodian recorded; locked rooms and absent custodians logged for a return visit. |
| After the count | Results sorted into categories; missing items investigated; register updated with approvals; write-offs referred to finance; report issued; follow-up actions owned and dated. |
If you are still choosing tags, read NFC vs barcode asset tags before the first count.
How Worxit handles this
Worxit Asset Management keeps one central asset register across all your locations. Staff register and onboard assets from a phone, and attach an NFC or barcode tag to each one.
- Scanning a tag confirms the asset during check-out, check-in, transfers and audits.
- Transfers between staff and between branches are recorded.
- Each scan is recorded with the GPS location, showing the asset's last known location.
- Every asset keeps a custody history, so you can see who had it and when.
The dashboard licence is R600 per month, including one admin user, and extra dashboard users are R75 per user per month. Each phone, tablet or radio running the app needs a R350 monthly device licence. Prices exclude VAT.
Frequently asked questions
What is a fixed asset audit?
A fixed asset audit is a physical check of the equipment in your asset register. A team visits each location, finds and scans each asset, and records its condition and custodian. The results are compared with the register so that missing, moved and unrecorded items can be dealt with.
How often should you do a fixed asset audit?
Agree the frequency with your finance team and auditor, based on the value and risk of your assets. A practical pattern is a full verification once a year. Add smaller spot checks of portable or high-value items, such as laptops and tools, during the year.
What is the difference between a fixed asset audit and a stock take?
A fixed asset audit checks equipment the business uses, such as vehicles, tools and computers. A stock take counts goods held for sale or for use in production. Assets are verified item by item against a register, while stock is usually counted by quantity per product line.
What should you do when an asset cannot be found?
Do not remove it from the register straight away. Search other sites, ask the last custodian and check transfer and disposal records. If it is still missing after the agreed search period, report it, follow your loss procedure and ask your accountant how to treat it.
Do you need asset tags to do a fixed asset audit?
No, but tags make each audit faster and more reliable. Without tags, teams match items by description and serial number, which is slow and error-prone. A barcode or NFC tag on each asset lets a scan identify it in seconds and records that it was seen.
Sources
- IFRS Foundation, IAS 16 Property, Plant and Equipment: the definition of property, plant and equipment. This guide does not give accounting advice.