Stringent control over fixed assets

Typically, when performing an initial inventory it is common to find that up to 15% of assets on the books may not be there. These assets are sometimes referred to as ghost assets. Additionally, it is possible to offset discrepancies, assets present but not on the books. These assets are referred to as zombie assets. The existence of ghost and zombie assets is the first evidence of poor internal control.

Based on recent events in the global marketplace, it appears that in the future, internal control of fixed assets is going to receive a lot of attention from auditors, the SEC and the PCAOB. With tighter restrictions coming down the pipeline, stringent control over fixed assets and their physical locations will remain a necessary business practice.

However, many organizations are still relying on spreadsheets or other antiquated systems that are time-consuming and require the active involvement of management personnel. Acquiring and utilizing a good fixed asset management system that incorporates barcode technologies will speed up physical audits, making them both fast and efficient.

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