How to Prepare Assets for Audit - Complete Guide
Complete Guide to Preparing for Asset Audit
Asset audit can be stressful, but with good preparation you'll pass without problems. Whether it's an internal audit, audit from funding organization or tax authority inspection - the key is systematic preparation and quality records. In this article, we'll show you step by step how to thoroughly prepare for an audit.
Types of Asset Audits
There are several types of audits you may prepare for. Each has its specifics:
Internal Audit
Conducted by your own staff or internal auditor. Focused on compliance with internal policies and process efficiency.
Funding Authority Audit
For public organizations, inspection from municipality, state or ministry. Emphasis on purposefulness and efficiency.
External Audit / Tax Authority
Inspection by tax authority or external auditing firm. Focus on depreciation accuracy and tax implications.
Audit Preparation Timeline
We recommend starting preparation at least 4 weeks before the planned audit:
Records Check
Conduct internal inventory, check record completeness and identify problem areas.
Document Completion
Complete missing acquisition documents, asset movement protocols and photo documentation.
Depreciation Check
Verify depreciation accuracy, book values and depreciation schedules.
Final Preparation
Prepare print reports, train responsible staff and ensure documentation availability.
Documents to Prepare for Audit
The following documents should be prepared and available before the audit begins:
Inventory Lists
Current asset lists by category, location and responsible persons with acquisition costs and book values.
Movement Protocols
Placing into service, transfers between departments, asset disposal - all with dates and signatures.
Acquisition Documents
Invoices, purchase contracts, delivery notes. For donated assets, donation agreements with valuation.
Depreciation Schedules
Tax and accounting depreciation overviews, depreciation group classification, depreciation start dates.
Inventory Records
Protocols from recent inventories, including resolution of inventory discrepancies.
Photo Documentation
Photos of significant assets, labels with inventory numbers, asset condition.
Learn more about proper inventory procedures in our article: Asset Inventory 2026 - Complete Guide
Most Common Audit Problems
Auditors most commonly discover these deficiencies when checking assets:
- !Ghost Assets - assets recorded in system but physically non-existent or already disposed without documentation
- !Missing Documents - acquisition invoices, placement or disposal protocols, missing signatures
- !Incorrect Depreciation - wrong depreciation group classification, calculation errors, depreciation not started
- !Missing Accountability - assets without assigned responsible person or with outdated data
- !Inventory Discrepancies - unexplained shortages and surpluses from previous inventories
What Auditors Ask
Prepare answers to typical questions auditors ask:
"What is the process for acquiring new assets?"
"Who approves asset disposal and how is it documented?"
"How often do you conduct inventory and by what method?"
"How are user permissions assigned and monitored?"
"How do you resolve inventory discrepancies?"
How Software Helps with Audit Preparation
Specialized asset management software significantly simplifies audit preparation:
Reports on Demand
Inventory lists, depreciation schedules, movement protocols - all ready to print or export to PDF/Excel.
Change History
Complete audit trail - who, when and what changed. Valuable for proving record accuracy.
Automatic Depreciation
Correct depreciation calculation according to legislation eliminates errors and simplifies verification.
Photo Documentation
Photos directly on asset cards - auditor sees actual condition without physical inspection.
Pre-Audit Checklist
Use this checklist to verify audit readiness:
Audit Preparation Checklist:
- ☐Internal inventory completed
- ☐All acquisition documents available
- ☐Asset movement protocols complete
- ☐Depreciation correctly calculated
- ☐Every asset has assigned responsible person
- ☐Inventory discrepancies resolved
- ☐Print reports prepared
- ☐Responsible persons informed of audit date
Frequently Asked Questions
How far in advance should I prepare for audit?
We recommend starting at least 4 weeks before the planned audit. Larger organizations or first-time audits may need more time. The key is to maintain quality records continuously - then audit preparation becomes much simpler.
What if the auditor finds discrepancies?
Be transparent and cooperative. Minor discrepancies are resolved through corrective action. What's important is demonstrating you have a system and are actively addressing any issues. Serious deficiencies may lead to penalties.
Do I need all documents in paper form?
No, electronic archiving is fully accepted today. What's important is that documents are readable, traceable and their integrity is ensured (e.g., PDF with timestamp). Software like Asset Manager allows storing document scans directly on asset cards.
How often do asset audits occur?
Depends on organization type. Public organizations may expect inspection from funding authority annually or every 2-3 years. External financial statement audit typically occurs annually. Internal audit should be conducted at least once a year.
What's most important for successful audit?
Continuously maintained quality asset records. If you maintain records properly all year, audit preparation takes hours, not weeks. Software with automatic calculations and print reports significantly simplifies this work.
Conclusion
Good preparation is the foundation of successful audit. The key is maintaining quality records continuously throughout the year, not just before audit. Asset Manager software helps you have everything ready - automatic depreciation calculations, complete change history and reports on demand ensure your audit runs smoothly and stress-free.
Prepare for Audit with Confidence
With Asset Manager app, you always have overview and required documents ready with one click. Try free and see for yourself.
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