How Your Accounting Department Could Aid Recovery with Fixed Asset Accounting
With US finance departments and corporate governance being held increasingly accountable under the stringent requirements of Sarbanes-Oxley (Sarbox) and IFRS in particular, the need for an asset tracking system has never been greater for US companies or their overseas operations. Company accountants have to ensure they remain up-to-date with the compliance requirements for their sector and CEOs and CFOs must be in a position to personally certify that the company’s books and records do not contain untrue statements and fairly represent the company’s results or face severe penalties for non-compliance, false declarations and other Sarbox violations.
For that reason alone it’s wise to invest in a fixed asset accounting software package. At the level of accounting complexity required in today’s legislative and business environment, spreadsheets can rapidly become complex and difficult to verify. Integrating a spreadsheet with other enterprise systems and tracking asset changes or producing a clear audit trail is also difficult. The problems caused by poor tracking of fixed asset management extend beyond possible Sarbox compliance issues. What happens if your company has to make an insurance claim for example? Without adequate asset tracking that incorporates asset depreciation software amongst other features, it’s perfectly possible that a ten-year old PC might still be on the asset register.
For an insurance assessor, alarm bells would ring, since the likelihood of such an outmoded machine being used very unlikely. The assessor would be disinclined to pay out and far more inclined to challenge every other item on the register.Suddenly the event that sparked the initial claim becomes more life-threatening to the company because the inability to confirm an assets existence and location will delay the insurance compensation payment.The only sure way organizations can protect themselves is thru the use a highly accurate, highly verifiable asset register. With this single record in place, it is a simple process to ensure any changes are updated within the system.
Tags: accounting, business, business accounting, depreciation, depreciation software, fixed asset accounting, fixed assets, recession