The Internal Auditor should review the control system to ensure that all assets are accounted for fully.

He/ she should review the means used for safe guarding assets against losses viz, fire, improper or negligent activities, theft, illegal activities etc.

He/she should review the control system for intangible assets, e.g, the procedure relating to credit control.

Where a company uses electronic control equipment, the physical and system control on processing facilities as well as data storage should be examined and tested.

He or she should review adequacy of the insurance cover for the various risks involved.

He/she should also verify the existence of assets.

Para 30 of the Companies(Cost Records And Audit) Rules, 2014 states that “records of physical verification may be maintained in respect of all items held in the stock such as raw materials, process materials, packing materials, consumable stores, machinery spares, chemicals, fuels, finished and then assets etc.

Reasons for shortages or surplus arising out of such verifications and the method followed for adjusting the same in the cost of the goods or services shall be indicated in the records.”