kpmg

Audit Programme
Wp Ref:

Client Audit Cycle

1st Cycle, 2005
Section Prepared by Date
Fixed assets & Insurance SR 25th December, 2005
Scope/Period of coverage Sources of Sample Size
Information
January to December 2005
No. Audit Steps/Work Done Wp Ref
1 To determine if policies, procedures, practices, and internal controls regarding
Fixed Assets are adequate and are in force with the current practice followed
2 Review the authority limits for FA management

3 Review the organization structure for the FA Department including

reporting lines (independence), job descriptions & segregation of
duties.
4 Verify whether there is an adequate budgeting process for long term
capital investment
5 Review the process of expenditure purchases from suppliers and check
for:
 Purchase orders
 Quotations obtained
 Quantity and price
 Credit period given
 Approval and authorization
 Item physically verifiable
 Expenditure identification and capitalisation
Use the internal control procedure document for verification of the
process.
6 Obtain a list of capital asset disposals and retirements for the period and
perform the following procedures:
 Check for proper approval.
 Removal from general ledger and fixed asset register.
Use the internal control procedure document for testing of
compliance
7 Scan the detailed supporting schedules for current year additions,
retirements and transfers of capital assets and determine whether
there appear to be any unusual items.
8 Verify if assets purchased under finance lease or hire purchase terms
9 Enquire as to a fixed asset register maintained and ensure adequate
controls over Physical Inspection
kpmg
Audit Programme
Wp Ref:

10 Ensure that the Company is adequately insured.

11 Obtain and review management reports or departmental report for
the Capital Expenditure.
Subject Remarks Wp Ref
Findings :

Risk or potential effect :

Recommendations :

Conclusion :