Fixed asset and inventory

Auditing fixed asset retirement in SAP

3 reading min.
picture of Prof. Dr. Nick Gehrke

written by

Prof. Dr. Nick Gehrke

Part V of the series: "Digitization of auditing SAP Fixed Asset and Inventory Processes"

Today's blog post presents three interesting indicators for detecting process weaknesses in the area of fixed asset retirement in SAP.

 

1. Auditing SAP processes in fixed asset and inventory
2. Master Data audit of SAP fixed assets
3. How to audit fixed assets procurement in SAP
4. SAP data analytics for fixed asset depreciation
5. Auditing fixed asset retirement in SAP
6. Process analytics for SAP current asset transactions
7. Segregation of Duties in SAP asset management
8. Fixed asset data structure in SAP
9. Professional Judgement in auditing SAP fixed assets

 

Before you proceed reading on the details of the indicators, I would recommend you read the concept of indicators first.

 

Three TOP indicators for fixed asset retirement in SAP

As already mentioned, every indicator is associated with a process, a process area, an audit objective and a risk respectively. In the following, three selected indicators in the area of fixed asset retirement are presented.

Altogether I have designed and implemented 22 indicators for the fixed asset process. You can download the details about all fixed asset indicators here:

 

Download pdf

 

P&L loss at retirement or sale of asset

This indicator aims at identifying saving opportunities.

There is a risk that asset retirement or sale to company stakeholders below actual value.

The criteria for this indicator is:

The document has been marked because a P&L loss is accounted for at time of sale or retirement of a fixed asset.

 

Fixed asset procured and sold/retired within one year

This indicator aims at identifying process standardization.

There is a risk that the value of an asset that is procured and sold/retired within one year could be manipulated to adjust profits and losses.

The criteria for this indicator is:

The document has been marked because a referenced fixed asset has been procured (activation date) and sold/retired (processing date of marked document) within one year (365 days).

 

Fixed asset retirement with only small profit

This indicator aims at identifying saving opportunities.

There is the risk that fixed assets were sold for a price below value.

The criteria for this indicator is:

The document has been marked due to a fixed asset retirement with a profit, but the profit is below 5 percent of the acquisition cost of the fixed asset.

 

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