Faculty of business department of accounting an assessment of fixed asset managementin the

2.4.2 Detective Control
Are designed to identity the undesirable results when they do happen these controls are more 
expensive than preventive controls but they are very important. First, they measure the 
effectiveness of the preventive controls. Second, some errors cannot be effectively controlled 
through a system of prevention; they must be detected when they occur detective controls 
include reviews and comparisons of documents.
2.4.3 Corrective Controls
Are designed to ensure corrective action is taken to reverse the undesirable out comes or to check 
that they don’t occur again, detection of errors is values if the identified error remains un
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corrected or can be permitted to recur, therefore , the management must develop systems to 
correct undesirable conditions and prevent recurrence(Barth and Clinch: 1998; 312).
2.5 Nature of Plant Assets
The terms plant assets; plant and equipment; property, plant and equipment; or fixed assets often 
are used to describe the entire complex of tangible assets used by a business enterprise in its 
operations active use in operations distinguishes these assets from other tangible assets, which 
are reported as investments, land held as a prospective building site, for example is an 
investment, when a building is constructed on the land and is in service, the land is reclassified 
as a plan asset. A characteristic common to all plant assets is that they yield services over money 
years. Plan assets other than land have a limited economic life; consequently, the cost of plan 
assets must be allocated as depreciation expense to the accounting period receiving benefit from 
their use(Barth and Beaver: 1998; 178).
2.6 Accounting for Plant Assets
Material Requirements Planning
Material Requirements Planning MRP covers a wide range of activities, which include Time 
Phased Orders; Requirements sorted by Vendor, Incorporate In House and Vendor Lead Times 
Focus 
on 
Time 
Delivery 
and 
reduce 
Inventory 
Levels. 
Material requirements planning or MRP involves getting material on hand when needed for 
production or sales. The Material requirements planning document should providefour basic 
items of information, when to place order, how much to order, who to order from and when the 
items need to be on hand. While some companies don't use MRP, but rely on expediting to 
accomplish this, other companies use the min max stock level. Both these methods are costly and 
often fail to meet production or sales needs that a good Material Requirements Planning process 
can provide. The only practical way to provide Material Requirements Planning is by using some 
type of computerized MRP program. Material Requirements Planning can plan, schedule and 
reschedule materials as far into the future as required. Lawrence Distal and Charles W. Haley 
(1994:70).
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Each company has an overall goal and a strategy for achieving that goal, but within the company 
there are groups whose focus may seem to be in contradiction to the Materials Requirements 
Planning process. The marketing group wants to make sure there are enough inventories on hand 
to supply all customer requests. The accounting group is charged with keeping cost down, which 
includes keeping inventory levels low. Lawrence Distal and Charles W. Haley 2nd edition 
(1996:71) in the middle there is the inventory control group. If the accounting group is quiet, the 
marketing group is demanding you to increase inventory. If the marketing group is quiet the 
accounting group wants to know why you have so many inventories. A good Material 
Requirements Planning system will help the inventory group balance both requirements, provide 
product for customer requirements and keep inventory levels low.
The goal of the MRP or Material Requirements Planning document is to supply information that 
will enable the company to have enough inventory on hand to fulfill demand, (and no more) 
available only when needed, (and no sooner) at a quality level that meets specification, (but does 
not have to exceed it) and at the lowest price. A good MRP or Material Requirements Planning 
program can provide the basic needs of keeping inventory levels low and fulfilling customer 
expectations for on time delivery Lawrence Distal and Charles W. Haley 8th edition (2004:65).
A plant asset is a bundle of future services. The asset will provide the cost of acquiring such as 
asset is a measure of the amount invested in future services that. At the time of acquisition, cost 
is also an objective measure of the exchange value of an asset.
Accountants use historical cost as the basis or recording and reporting plant assets because it is 
objective and because it is a measure on of the investment in future services (William andJotten, 
1982; 87)