The intention of this blog post is to provoke your thought regarding some of what I call the worst corporate accounting scandals in history as well as some of their more immediate consequences and the need of changing attitudes regarding fixed asset management practices.
These are more than just internet stories of white collar criminals. They are fraud schemes that resulted in loss of billions taken from corporate and investor coffers. Companies were forced into bankruptcy, costing hundreds of jobs, reputations were ruined and families were torn apart.
These are just a handful of events; some of the events we have just read about were in some manner due to failure of developing solid procedures for proper asset verification.
Like always, the global reaction to such has been the culmination of a continuous series of changes in asset management practices. The changes have encompassed strong regulatory frameworks and advancements in physical asset verification technologies.
Auditors have increasingly become intolerant to poor asset verification practices. It is no longer considered acceptable for a company to go for two years without getting its fixed assets verified at least once.
Additionally, physical verification of fixed assets has been made mandatory by corporate laws of many countries. In case of some countries it is now mandatory for the Auditors to report on maintenance of proper records, physical verification and substantial disposal of fixed assets.
No doubt, it is now becoming obvious that in future those responsible for the maintenance of proper records and physical asset verification will be more likely called to account when there is such a scandal, and it can be seen by recent trends, it is likely that it will not be companies but individuals like facility managers and financial controllers.
Does the process of asset identification, tagging and reconciling fixed assets every period stands out as an area of administrative burden and glaring inefficiency? Outsourcing has become one of the catch-cries by companies offering fixed asset verification solutions aimed at lowering direct costs.
About the Author:
Fixed Asset Consultant at Prosperity Agencies Limited with over 10 years practical experience in physical verification, bar-coding of assets and fixed asset software implementation +260 211 239859
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Nice information about Physical verification of assets, thank you for sharing useful content.
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