Asset Audit and Asset Register – Frequently Asked Questions

Why keep a regular audit of your company’s assets?

An asset audit and asset register for your company has many benefits besides the just passing your next government or agency inspection. Keeping a list of assets will allow your business to accurately maintain these assets for safety, to save money on emergency breakdown repairs and easy to access financial data for board reports or your accountant. 

How does an audit of company assets save you money?

Having been in the building and construction industry for over 35 years, MDF Group can say with confidence that there are always two prices. Price #1 is a fair and reasonable cost for planned repairs or maintenance work (in any trade) where the tradesperson or subcontractor has ample time to schedule the work. Price #2 is the ‘urgent’, ‘last minute’ or ‘just get it done now’ price that subcontractors squeeze on top of their workload, often paying their staff overtime and thus bumping up the price of their work significantly.

Without an asset register, urgent and emergency repairs are inevitable, and so is paying top dollar for the repairs or replacement of these assets.

We can link an asset register to a planned maintenance schedule, so every single asset (down to the humble staffroom kettle) is assigned a repair or replacement date, which will send a notification to a registered email address ahead of time.

How does an audit of company assets make your facility safer?

You’d be surprised how often we come across unsafe, outdated or superseded assets, including electrical items. If you are working in a high risk environment like Aged Care or Health, your residents are your #1 priority. An asset register linked to a maintenance schedule is your insurance against falling, sparking, rusting or breaking assets that are used every day by residents or staff.

How does an audit of company assets help you keep accurate financials?

To balance your fixed asset sheets within your company financials, you’ll need some kind of list of your assets. If you omit some assets or their value or cost to maintain is not accurate, your financial records will be inaccurate, which can be a pain for your accountant and leave you short of information for your next board report. As a refresher, here is how your assets behave over time, from a financial perspective:

Asset Purchase Price – Accumulated Depreciation = Asset Carrying Value

Combined Amount of Assets’ Carrying Values – Disposition of Assets = Account Balance of Fixed Assets.

If your company has a public profile, you will need accurate records of your assets to maintain a balance in your equities and investments. Charities, educational institutions, Government or private companies are advised to track and classify asset details by their grants, funding sources or investors.

How does an asset register help you pass an agency or government audit?

The process of carrying out audits may not always be the same. Usually, companies keep performing regular but small audits throughout the year and one comprehensive one at the end of each year.

However, you should follow these principles while carrying out an audit of your assets:

• Have a look at your previous assets stats.
• Evaluate your current asset records.
• Perform a comprehensive comparison to make sure that the current numbers coincide with previous balance sheets.

While comparing your current records with the previous ones, verify that the following are true about your assets:

• The assets value is accurate and authenticated.
• It is properly classified.
• The asset’s transaction details (sales/purchase dates) are correct.

Can an asset audit and asset register help you track theft?

According to The Department of Justice, one third of employees perpetrate some degree of employee theft. Knowing exactly what assets belong to your company or Aged Care Facility (and regular spot checks of these items by staff) ensures early retrieval of these assets or immediate reporting to police or insurance companies, where required.