Question

Its often said that the CFO and accounting department are the last line of defense before assets are missing because they would know right away if the assets are gone. The CFO is an employee of the company no different than other employees.

Is this true, pls explain Comments?

Answer 1

Yes, it is true.

The finance/accounting department maintains a fixed asset register that contains the details of all assets of the firm.

The details maintained are, the type of asset, the date of purchase, the original cost, the life in years, the number of items if it is a group of similar items, the location of the asset, the date of sale/disposal etc, and so on.

Physical verification of all the assets would be done in such a manner that, the physical existence of all assets is verified over a period of time. Costly items may be verified more frequently.

It is the physical verification, which is usually programmed by the finance/accounts department, which ensures that, all assets that are bought remain not only in books but also in physical existence. Hence, the statement can be considered as true.