Internal Controls:
1. Occurrence/Validity - Supported by a fixed asset requisition and capital budgets. (Supporting documentation) and recorded assets are periodically compared to physical assets by an independent senior official
2. Authorization - Purchases and sales of fixed assets: Authorized by senior management on a numerical capital requisition/sales document and Authorisation/decision recorded in minutes
3. Completeness - Capital requisitions are numerically accounted for (Sequentially pre-numbered), List of missing numbers regularly followed up and fixed assets recorded in fixed asset register and regularly compared with fixed assets
4. Accuracy - Fixed assets are recorded at the amount of the invoice with depreciation and other calculations done by computer with a program which has been tested beforehand (if calculation is per hand, perform an independently reviewed on calculation)
5. Recording - Purchases and sales of fixed assets are recorded in the fixed asset ledger accounts (control account) and fixed asset register from the source documents and fixed asset register is reconciled with the control accounts in the ledger on a regular basis
6. Classification - Fixed assets are classified into the respective categories according to company policy and improvements are capitalised as fixed assets and clearly distinguished from maintenance
7. Cut off - Fixed assets purchased are recorded at the date of receipt (per GRN) and when sold as from the date that the risks and rewards of ownership passes to the purchaser in substance
8. General Controls - Fixed assets are, as far as possible, stored in permanent form (bolted), assets are safe guarded by limiting access to authorized persons (locked, key control) and controls protecting assets against physical elements (rain, weather). Assets should be adequately insured