At RAM we know that the audit process can be extremely tedious and hugely time consuming for all involved, especially when things don’t always go to plan.
We also know that it can be a troubling time if your organisation is qualified following an audit and companies will strive to avoid this. With this in mind it is more important than ever to put plans in place to ensure you don’t get qualified next year or at any point in the future.
I recently did a blog post about the end of audit for the commercial sector and actually much of the same advice is relevant for the public sector also. As I said in my previous blog, being able to account for fixed assets, knowing what you have, where it is and, also, if it is being correctly maintained is often one of the sticking points flagged from an audit. The term ‘robust systems’ is often used by auditors to determine whether financial statements are tamper-proof, if there is an audit trail of everything that’s happened over the last year and to gauge the current state of fixed assets within the company. Many organisations just simply do not have the systems or procedures in place to be able to show this.
For some sectors, in particular housing, regulations like FRS 102 will come into play and further affect the reporting standards. With FRS102, organisations will see changes in:
• The criteria for recognition of some assets and liabilities
• The measurement basis of some items
• The treatment of some gains and losses
And for public sector bodies that manage a number of leases through their business, FRS 102 will require changes to how they report these. So with these additional changes in mind and the risk of being qualified on the minds of most fixed asset managers, now is the time to get prepared.
By acting now and implementing an effective fixed asset software solution, you can ensure that when the auditors come knocking next year, your systems mean you pass with flying colours!