Critical stages of internal control

A comprehensive system of internal control of fixed assets encompasses a number of steps. Here are the critical stages: Capital expenditure approval controls are assumed to be in place. In most organizations, amounts above a structured threshold must be approved at senior management or executive level officials in an organization.

Set up property record (software) and barcode. Today’s fixed asset software systems have substantial capacity and features. Conversion to a professionally developed and supported system, such as Asset4000, is quick and efficient. Barcode identification is recommended to be used on most assets controlled by the fixed asset software system.

Determine life and depreciation method. While many companies use the same lives for corporate book and tax book, there is no requirement that this be done. Many companies would gain from ‘uncoupling’ the two systems. Similarly, different depreciation methods can be used for corporate book and not tax.