Internal Audit Financial Controls Programme

6. Fixed Assets Purchases 6.1 New capital assets are properly authorised and subject to tendering process in accordance with the Capital Expenditure policy and procedures and also Approval Limits. Testing Review the capital assets purchasing policy for compliance with policy. Sample three capital assets acquired in the previous 12 months to ensure that the policy has been applied and the purchases have been appropriately authorised. Results Recording 6.2 Expenditure is only capitalised if in accordance with the policy, otherwise it is expensed. 6.3 6.4 6.5 A fixed asset register is maintained in which all capital purchases and disposals are recorded. Updates to the fixed asset register are authorised and checked. Fixed asset registers are regularly reconciled to the Accounting records, including the General Ledger. Testing 1. Obtain a copy of the Fixed Asset Register. 2. Review this to ensure capitalised items are in line with policy. 3. Find out who can make amendments to the Fixed Asset Register and whether amendments are checked and authorised. 4. Verify whether the Fixed Asset Register is reconciled against the GL. Check the balances of both and obtain explanations for any difference. Results Existence 6.6 Fixed assets are physically verified on a regular basis and agreed to the fixed asset register. The results are documented. Testing Enquire when the fixed assets were last physically verified and reconciled to the Fixed Asset Register. Review the documentation for this. Results Valuation 6.7 Revisions to valuations (eg due to obsolescence, revaluations and write-offs) are properly authorised. 6.8 Depreciation is calculated in accordance with Group policy and rates. Depreciation is recorded at individual asset level. Testing 1. Enquire whether any revaluations have been made. If yes verify how these have been authorised. 2. Obtain the local depreciation policies. Review these for compliance with the policy. 3. Review the Fixed Asset Register to ensure that depreciation has been

Page 1 of 2

Internal Audit Financial Controls Programme

correctly applied. Results Security 6.9 Fixed assets are safeguarded from waste, fraud, loss, unauthorised use and misappropriation by human action or natural occurrences (eg weather and natural disasters). Testing Enquire how fixed assets are protected from the above risks. Results

Page 2 of 2