"AJSH & Co LLP"    is now    "Mercurius & Associates LLP" "AJSH & Co LLP"    is now    "Mercurius & Associates LLP" "AJSH & Co LLP"    is now    "Mercurius & Associates LLP"

Physical Verification of Assets

Avoid risks, conduct a physical verification of assets today

Physical verification of assets is a process conducted by auditors to make sure that the assets of an entity actually exist. It is of immense importance for every business to carry out this process at the end of every financial year. Our approach to verification is to conduct a line-by-line reconciliation of fixed assets accounting records to assets found during the physical inventory taking process. We have a team of associates and supervisors to work on permanent account number (PAN) India & international basis. In order to serve in remote locations, we have a special team adjustable to local language and location.

Objective of Physical Verification of Assets:
  • It is a statutory compliance as per CARO 2016
  • Ensures existence of assets of an entity
  • Facilitates valuation and rectification for any accounting discrepancy
  • To manage internal compliances of the entity
  • Critical for continuous customer service

This requires objective assessment of ledger contents and internal controls that support asset management. The process includes:

  • Automated comparison of asset tag and serial numbers.
  • Automated and manual comparison of manufacturer model numbers.
  • Comparison of additional available information such as description, location and department are taken into consideration.
  • An effort to address potential matches by description, manufacturer, model and serial number that may appear elsewhere in each record entry.
  • Allocation of bulk entries and grouped assets to the individual assets (computer equipment, furniture, manufacturing equipment, etc.)
  • Follow-up visits as necessary to verify any residual assets and / or gather additional information.
  • Creation of audit trail for linking the reconciled inventory file with the existing fixed asset accounting records.

At the closure of the verification, we provide an audit trail in an excel spreadsheet along with several specific reconciliation reports such as matched assets, unrecorded additions and unrecorded retirements.

Our team of experts will:
  • Consolidate physical report for all sites and assets / inventories
  • Perform reconciliation between physical count and book count
  • Compute difference and identifying the reasons
  • Executive Summary (signed off by Technical, SCM, Finance, MAS)
  • Provide Physical Verification Report
  • Physical Verification of Inventory


Physical verification or observations of fixed assets are referring to the same procedure being used by auditors to verify the existence and condition of assets. Auditors also need to review the counting procedures from before count, during the count, and after the count.

The object of verification is to satisfy the auditor as to existence, ownership, possession (in case of assets) or completeness (in case of liabilities), valuation and disclosure of items mentioned in the balance sheet

  • To find out the ownership and title of the assets.
  • To find out whether assets were in existence.
  • To maintain internal compliances of the entity
  • To detect frauds and errors, if any.
  • To find out whether there is an adequate internal control regarding acquisition, utilization and disposal of assets.

Following are the asset audit techniques:

  • Asset Physical Existence
  • Purchase Asset for Business
  • Asset Ownership
  • Correct Asset Evaluation

At MAS, we assist you with consolidate physical report for all sites and assets / inventories, perform reconciliation between physical count and book count, compute difference and identifying the reasons, executive Summary (signed off by Technical, SCM, Finance, MAS), provide Physical Verification Report and provide physical Verification of assets/ inventory.


Ready to assist with your Queries