Which control ensures the asset register is reconciled to physical assets and to the general ledger?

Which control ensures the asset register is reconciled to physical assets and to the general ledger?

• A. Board approval
• B. Order by tender from approved suppliers
• C. Assets barcoded and secured
• D. Reconciliation of asset register to physical assets and general ledger

Answer: (D)

Reconciliation between records and reality is essential for accuracy. The control that compares and aligns the asset register with the actual physical assets and with the general ledger provides direct evidence that assets exist, are owned, and are recorded correctly in the accounts. By regularly matching what the organisation holds physically to what is listed in the asset register, and then linking that to the amounts in the general ledger, you can spot missing assets, unrecorded disposals, or misclassifications, and you can adjust records and postings accordingly. This keeps asset values, depreciation, and disposals consistent across reporting. In practice, this involves periodic physical counts, verifying each asset against the register, confirming any discrepancies, investigating causes, and making the necessary write-backs or adjustments in both the asset register and the general ledger. Ideally, this reconciliation is performed by an independent function to maintain objectivity and strengthen audit evidence. Other controls, such as board approval or procurement processes, or merely tagging and securing assets, support asset management but do not by themselves ensure that the asset register is reconciled to physical existence and to the general ledger.

Reconciliation between records and reality is essential for accuracy. The control that compares and aligns the asset register with the actual physical assets and with the general ledger provides direct evidence that assets exist, are owned, and are recorded correctly in the accounts. By regularly matching what the organisation holds physically to what is listed in the asset register, and then linking that to the amounts in the general ledger, you can spot missing assets, unrecorded disposals, or misclassifications, and you can adjust records and postings accordingly. This keeps asset values, depreciation, and disposals consistent across reporting.

In practice, this involves periodic physical counts, verifying each asset against the register, confirming any discrepancies, investigating causes, and making the necessary write-backs or adjustments in both the asset register and the general ledger. Ideally, this reconciliation is performed by an independent function to maintain objectivity and strengthen audit evidence.

Other controls, such as board approval or procurement processes, or merely tagging and securing assets, support asset management but do not by themselves ensure that the asset register is reconciled to physical existence and to the general ledger.