Today asset audit preparation has become a complex process with increased regulations. It is more hectic than before if you are not prepared with the right audit processes and procedures. Asset audit software helps when it comes to the right audit preparation as it includes complete maintenance, accuracy, and up-to-date asset records (from the beginning of the financial year).
Manual auditing was never on the picture as it is effective for only those businesses which have very less amount of assets. The probability of this scenario in existence is very low if a business would have a low number of assets.
Every business acquires some major and necessary assets according to their industry but there are some assets used in offices regardless of their industry such as computer systems, furniture, and fixtures, HVAC systems, etc.
For these organization which acquires a bunch of assets, manual auditing at the end of the financial year is a big mess for them. Asset audit software helps them by making the whole process easy when it comes to audit preparation.
Asset management software with fully automated features gives you assurance to efficient risk management, governance, and control processes.
The following are the aspects you should look for in an efficient asset management software that could help in conducting asset audits easily in less time.
Aspects for Asset Audit through Asset Management Software
1. Knowledge of Assets That Need to Be Tracked
An automated asset tracking software captures the detailed information of all the assets. From movable to non-movable assets, their location history, condition, owner information, and maintenance history of each particular asset along with other information can be found in Asset Infinity's centralized reports, that are required for the auditing purposes. The application acts as a complete register that provides access to all the relevant data in real-time.
Also Read: What is Asset Auditing? What are Audit Objectives & Benefits?
2. Bar-Coding and Scanning
Unique barcodes are assigned to all the assets acquired in the organization and afterward, they are scanned through scanning devices to check the relevant information which allows making informed decisions. Also, helps to track the assets about their particular location, frequency in which they are used, and their usage ability.
3. Accurate Asset Record
Assets distributed across the locations can easily be audited without going to each location. It can be done using cloud-based asset management software, where mobile devices can be used for asset verification. Then data will synchronize and reflect in the records as well. It will reduce the chances of wrong data inputs, improving accuracy, and assisting organization to conduct asset audits as per the requirement.
4. Internal Audit Report
Once the audit team verifies the asset register with their actual presence across locations, an accurate audit report will get generated in the system automatically. This report can be exported in various file format if needed. Hence with the help of Asset Infinity software, it is easy to streamline the process and execute the plan according to the strategy, to ensure that all the financial data is correct and up-to-date.
Benefits of Audit Through Asset Management Software
The asset audit software assists a lot in making the audit procedure easy and simplified. It also helps to carry out the audit procedures in a streamlined manner. Following are the benefits of conducting audits:
1. Calculate Actual Growth Vs Expected Growth
To set the business goals it requires a lot of hard work and resources. With the loss of resources, a business would not be able to meet the target as decided. For this, internal audit provides an easy way, after generating reports of your business progress, it is easier to compare as well as set trends for the future business strategies.
2. Reduced Risk of Fraud
Inventory audit software includes a cautious planning and execution of inventory management. Your inventory, counts in your capital investment to make sure of your desired outcomes or returns. Audits help to figure out the assets that drag your rate of return so that you can cut down on costs, optimize its usage, and manage your finances.
3. Compliance with Government Regulations
There is a tough competition in the market so you need to keep up with the rules and regulations designed for the organization. If not done, things will get out of hands then you will face some non-compliance lawsuits. To prevent this, it's important to hold internal audits to ensure the meet of legal standards at all times.
Also Read: How Effective Are Mobile Audits to a Business?
Asset Audits Ensure Streamlined Business Activities
Asset audit software helps to streamline your business activities in many ways, such as:
1. Evaluation of Performance
All the business activities and performances are evaluated with asset audits and helps in taking wise decisions that would not repeat the previously made mistakes. To keep the performance intact and avoid the repetition of the same mistakes, it is necessary to keep a record of past occurrences. The audits will help to identify the wrong and how they can be fixed for the future, doing this you can save the overhead costs and assure to use the assets in the best possible way.
While conducting asset audits, it is important to have past information related to your organization's assets. Asset tracking management software helps you keep track of all the history of inventory items. This enables you to keep yourself updated with the historical records of asset usage and the latest trends on asset's utilization. Previous records make the audit session easier and convenient.
2. Cost-effective Strategies
To maximize the returns on capital investment it is important to generate the entire list of expenses that are related to the inventory. Without any proper record of transactions, it is difficult to pose a challenge as without the proof of investment. Also it's hard to justify the credibility and transparency of business operations.
Nobody wishes to deal with such a situation during audits. So, to make things easier asset management software ensures to prepare a list of all expenses related to the assets.
3. Utilization through Life-cycle Management
As the useful life of the asset changes over the time, its depreciation is also necessary as a valuable concept. You also need to update your assets audit records regularly to maintain the accuracy of the financial records.
Deprecation also helps in tax reduction, if considered because a single asset won't be used for the whole year and the overhead cost can spread over the useful life of the asset. Hence, depreciation is necessary when it comes to audit sessions.
Many organizations suffer huge losses during their audit season due to the absence of organized data on business assets which concludes inappropriate data and incorrect financial records. Such scenarios are easily avoided through simple asset management practices if implemented at an early stage.
Thus, the asset audit software becomes important as it provides easier and simpler procedures for auditing with efficient data management through tracking history to evaluate the performances. It can provide transparency in costs and asset purchases for improved insight into business performance. You can also keep track of depreciation and know when to retire assets for optimized business functions.
Read More: How to Prepare Your Organization for an Asset Auditing Process?
Frequently Asked Questions (FAQs)
1. What is asset management audit?
An organization's maturity in asset management practices and processes can be concluded through the application of an asset management audit. By optimizing the management practices and processes for business assets, a positive contribution is made to the profitability of an organization.
2. What is asset tracking software?
Asset tracking software enables tracking and movement of all the devices, equipment and assets within an organization. It provides an overview for all the inventories that makes up an infrastructure and tracks the location of each and every asset.
3. What is the audit process step by step?
The steps to audit process are:
Step 1: Define Audit Objectives
Step 2: Audit Announcement
Step 3: Audit Entrance Meeting
Step 4: Fieldwork
Step 5: Reviewing and Communicating Results
Step 6: Audit Exit Meeting
Step 7: Audit Report