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AssetVow

Problem study · for Finance and audit

Assets missing at physical verification: why the count never matches

Every March someone prints the fixed asset register and walks the office. Laptops are with people working from home, monitors moved to another floor, and the box sent to the Pune office last year is on nobody’s list. The auditor asks what you did about the differences.

Updated 4 November 2026 · Built from the public sources listed at the end

3(i)(b)

CARO 2020 clause asking whether PPE was physically verified at reasonable intervals and discrepancies dealt with in the books.

Source

3 things

The auditor reports on: verification at reasonable intervals, material discrepancies found, and how they were dealt with.

Source

What the auditor is asked to report

Under clause 3(i)(b) of the Companies (Auditor’s Report) Order 2020, the auditor reports whether property, plant and equipment were physically verified by management at reasonable intervals, whether any material discrepancies were noticed, and whether they were properly dealt with in the books of account.

So a count is not enough. You need to show when it was done, what was found, and what happened to each difference: found elsewhere, transferred, lost and written off with approval.

Why the count does not match

The register is usually right on the day it is updated and wrong a month later. Laptops are swapped at the help desk, couriered between offices, and taken home by people who now work remotely. None of these moves updates the register, because nobody opens the spreadsheet at the moment they happen.

  • Assets with people at home cannot be seen on a walk-around
  • Transfers between offices are not recorded until someone asks
  • Items without labels cannot be matched to register rows
  • Losses are found at the count, months after they happened, with no approval trail

How to make the count a non-event

Keep the register current all year, then the count only confirms it.

  • Label every asset, so a count is a scan, not a guess.
  • Record every hand-over, return and transfer when it happens.
  • Freeze the list of what should be in each office when the count starts.
  • Ask people who work from home to confirm what they hold, instead of skipping them.
  • Record each difference with an outcome: found elsewhere, moved, or lost with a write-off approved by the right person.
  • Count high-risk items, such as laptops and phones, more often than furniture.

The usual way, and with AssetVow

  • The list to count againstUsually: A printout of the registerWith AssetVow: An audit with the expected list frozen at the start
  • CountingUsually: Ticks on paperWith AssetVow: Scan QR labels with any phone, or tick items
  • People at homeUsually: SkippedWith AssetVow: Self-audit: each person confirms on My assets what they hold
  • DifferencesUsually: A note in the audit fileWith AssetVow: Not counted marked Missing; losses go to the owner as write-offs
  • EvidenceUsually: Emails and spreadsheetsWith AssetVow: Every check and decision in the audit log

What AssetVow does not do here

  • AssetVow keeps the asset register and the counts; your books stay in Tally or Zoho Books, where finance posts the write-offs.
  • AssetVow does not use RFID; counts are by QR label scan or ticking.

QR labels, stock counts and self-audits

Print labels, scan with any phone, freeze the list when the count starts, and let home workers confirm what they hold.

See how it works

Related

Sources

Read on 4 November 2026. Laws and rules change; check the current text or ask your lawyer before acting.

  1. Taxmann: Property, plant and equipment under CARO 2020 (clause 3(i))

FAQ

Common questions

Is physical verification of fixed assets mandatory?+

CARO 2020 asks the auditor of companies it applies to whether management verified PPE at reasonable intervals and dealt with discrepancies in the books. Check with your auditor whether CARO applies to your company and how often they expect counts.

How often should we verify IT assets?+

At least once a year, and more often for laptops and phones, which move and go missing more than furniture. A rolling count of one office a month spreads the work.

What do we do with assets we cannot find?+

Record each one with an outcome: found elsewhere, transferred, or lost. A loss should be approved as a write-off by the right person and then reflected in the books.

Make this year’s count match

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