Question

How to analyze a ledger account ?

Answer 1

The general ledger is the core of the financial reporting system, so it’s an ideal place to start an audit engagement. Analyzing 100% of the general ledger data helps you gain a deeper understanding of what has transpired during the year.

Since the general ledger holds nearly all the financial information used to create the financial statements, it often contains massive amounts of data. Rather than sort through the data manually, consider using different methods and software tools to quickly identify anomalies and outliers.

The AICPA Center for Audit Quality recommends using Computer Assisted Audit Techniques (CAATs) to run the following queries:

Find journal entries that do not balance

Find gaps in journal entry number sequence

Find high-dollar journal entries

Find possible duplicate account entries

Find round-dollar journal entries

Show journal entry information by employee

Find all entries made by a specific employee

Show values for the “journal entry type” code

Find manual entries

Sample journal entries (random or high dollar)

Find specific journal entries (by month, day or JE#)

Find all entries containing specific account(s)

Find all entries within a range of accounts

Find post-dated entries

Find entries with unusual (non-standard) descriptions

Find entries posted on weekends