Test log entry using Excel

This selection process gives the audit team a number of journal entries: # 57, # 120, # 121, # 310, # 311, # 312, # 390, # # 478, # 479, # 549, # 550, # 609, and # 610. Some of these entries appear to be routine and may not require special monitoring (other than an explanation of why they were made). were posted on a public holiday); thus, the mission team decides to investigate only the journal entries having an impact on the income statement: n ° 311, n ° 390, n ° 478, n ° 609 and n ° 610. The team notes to again that scriptures # 609 and # .610 have already been selected to be tested in further tests.

UNPREDICTABILITY IN LOG ENTRY TESTS

In addition to the targeted testing of journal entries, the audit firm is also expected to select random journal entries for testing. Such a selection process can be relatively straightforward. For example, the team selects the following entries by scrolling through the list of journal entries and randomly selecting a few for a test sample: # 41, # 119, # 176, # 305, and No. 480.

COMPLETE VERIFICATION PROCEDURES FOR SELECTED LOG ENTRIES

After the audit team selects the journal entries for testing, they take action to finalize the procedures. The team requests appropriate documentation and explanations from the client. Two journal entries selected for testing are associated with multiple red flags: # 609 and # 610. The team received the appropriate information and made the necessary conclusions regarding the journal entry tests, assessed the impact of these results and, if necessary, performed additional test procedures.

In conclusion, as this use case demonstrates, the accounting professionals at Just4this Example were able to successfully apply CAAT to journal entry tests with the help of Microsoft Excel and without the need for specialized software. Using Microsoft Excel provides an alternative for small and medium-sized audit firms to consider when performing journal entry tests or other CAATs during audits.


About the authors

Inna Voytsekhivska, Ph.D., is Assistant Professor of Accounting at Western Michigan University. Igor Voytsekhivskyy, CPA, CIA, is the CFO of a Michigan-based health care information nonprofit. To comment on this article or suggest an idea for another article, contact Jeff Drew, a JofA editor, at [email protected] or 919-402-4056.


AICPA RESOURCES

Item

“Use Excel and Benford’s law to detect fraud”, JofA, April 2017

Auditing standard

AU-C article 240, Consideration of fraud in an audit of financial statements

Private Business Practice Section and Succession Planning Resource Center

The Private Companies Practice Section (PCPS) is a voluntary membership section of CPA firms that provides member firms with targeted practice management tools and resources, including the Succession Planning Resource Center, as well as ” a strong and collective voice within the CPA profession. Visit the PCPS practice center.

IMTA section and CITP identifier

the IInformation Management and Technology Assurance Section (IMTA) supports AICPA members who provide services in the areas of information security and cyber risks, privacy and IT risk management, business intelligence and emerging technologies. CPAs can also sue Certified Information Technology Professional (CITP) designation, which demonstrates that a person has the expertise to advise organizations on how to maximize information technology to run their business. Access to IMTA tools and resources is included in the AICPA membership.


LEARNING RESOURCES

For more information or to make a purchase or register, visit us.aicpa.org/cpe-learning or call the Institute at 888-777-7077.

AICPA / CPA.com Digital CPA 2021 Conference

December 5-8, Nashville, Tennessee.

Digital CPA is for practitioners curious about technology and its impact on the accounting landscape. Together, we challenge business models, transform areas of practice, and drive innovation across the profession.

AICPA Practitioner Symposium and Tech + Conference and AICPA National Advanced Technical Accounting and Auditing Symposium (NAAATS) at AICPA ENGAGE 22

June 6-9, Las Vegas

Learn about the latest trends in technology and auditing that are shaping the accounting profession. The Practitioners Symposium and Tech + Conference and the NAAATS are two of the nine conferences that make up the must-see accounting conference of the year.

Simplified Excel Report Series

The Simplified Excel Report Series includes four webcasts that will walk you through step-by-step demonstrations on how to create and use PivotTables to increase your productivity and efficiency as a finance professional.


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