General Ledger For Internal Auditors
Analytics Tests
Journal entries, particularly manual journal entries, can be a source of significant risk. There are many tests that can quickly identify high-risk JEs and risk-score them.
General Ledger
Duplicates/ Split Entries/ Closings
Duplicate GL Accounts
To ensure accuracy and validity of journal entries that are entered in the general ledger accounts and identify duplicate GL accounts based on same account. Identify all journal entries posted to GL accounts that begin with the same GL account number (first digit), and same GL account name. Duplicates
Duplicate JE's
To ensure accuracy and validity of journal entries created in the Posted to avoid duplicate entries. In the previous period, identify all journal entries line items to the same GL account for the same amount with the different journal entry Numbers. Duplicates
Duplicate JE's
To ensure accuracy and validity of journal entries created in the daily to avoid duplicate entries. In the previous period, identify all journal entries with the same journal entry Number for the same amount and same Location. Duplicates
Single JE Multiple Accounts
To ensure accuracy and validity of journal entries allocation to general ledger accounts. In the previous period, identify all journal entries split across multiple GL accounts and where the accumulated amounts exceed the minimum threshold amount. Split Entries
Multiple JE's Same Account
To ensure accuracy and validity of journal entries allocation to general ledger accounts. In the previous period, identify all journal entries entered multiple times to the same account and same location where the accumulated amounts exceed the minimum threshold amount. Split Entries
JE Cut Off
To ensure authorization and validity of journal entries entered close to period end closing of the GL. On a quarterly basis, identify all journal entries over the minimum threshold amount where the current entry date (JE create date) is within X days before closing and within 4 days after the period end, with the effective date in the previous quarter. Closings
JE Cut Off
To ensure authorization and validity of journal entries entered close to period end closing of the GL. (Monthly/quarterly/yearly) Identify journal entries entered X days prior to period end that have been re-opened and exceed a dollar threshold. Closings
Authorizations
Unauthorized JE's
To ensure only authorized individuals have access to create journal entries. List all journal entries where the user id of the individual creating the journal entry is not included in the authorized employee table of journal entry creators. Authorizations
Restricted Users
To ensure only authorized individuals have access to create journal entries. List all journal entries where the user id of the individual creating the journal entry is included in the restricted employee table of journal entry creators. Authorizations
Single JE's - Approval Threshold
To ensure authorization and validity of journal entries based on approval limits defined in control policies and procedures. In the previous period, identify journal entries that exceed the single Employee Approval Limit for the same journal entry Authorizations
Split Journal Entries- Approval Threshold
To ensure authorization and validity of journal entries based on approval limits defined in control policies and procedures. Identify cases where the same person splits a larger entry into multiple smaller entries to avoid exceeding their approval limit. Authorizations
Create JE Vs Approve JE - SOD
To ensure authorization and validity of journal entries to identify any conflicts in segregation of duties. Identify entries created and approved by the same person. Authorizations
Create JE Vs Create Account - SOD
To ensure authorization and validity of journal entries to identify any conflicts in segregation of duties. Identify entries where the person creating the entry also created the account. Authorizations
JE's - Weekends & Holidays
To ensure accuracy and validity of journal entries during weekends and holidays. In the previous period, identify all journal entries created on weekends or holidays that may indicate unusual activities. These dates are defined by the fixed holidays, variable holidays and unauthorized weekday parameters. Authorizations
Key Accounts
Adjustments to Dormant Accounts
To ensure authorization and validity of journal entries to dormant accounts. Identify all journal entries made to GL accounts where the different between the current entry date and the date of the last journal entry to the same account is greater than the dormant period. Key Accounts
JE's - New GL Accounts
To ensure accuracy and validity of journal entries entered to new accounts incorporated in the general ledger by monitoring the transactions made to newly created GL accounts. In the previous period, identify all journal entries greater than the minimum threshold amount made to GL accounts where the GL account create date falls within the tested period. Key Accounts
Journal Entries to Temporary Accounts
To ensure accuracy and validity of journal entries entered to temporary general ledger accounts. Identify material journal entries entered as adjustments posted to temporary accounts shortly before closing a period. Key Accounts
Outstanding Journal Entries to Temporary Accounts
To ensure accuracy and validity of journal entries entered to temporary general ledger accounts. Identify material journal entries entered into temporary accounts that have not been allocated to an appropriate GL account within X days. Key Accounts
Outstanding Journal Entries to Accrual Accounts
To ensure accuracy and validity of journal entries entered to accrual accounts in the general ledger accounts. Identify material outstanding journal entries entered in the accrual’s general ledger account that have not been allocated to the appropriate payable sub ledger accounts within X days of posting. Key Accounts
Outstanding Journal Entries to Deferred Income Accounts
To ensure accuracy and validity of journal entries entered to deferred income l accounts in the general ledger accounts. Identify material outstanding journal entries entered in the deferred income general ledger account that have not been allocated to the appropriate payable sub ledger account within X days of posting. Key Accounts
Data Quality / Keywords / Reversals / Even Amounts
JE's - Key Word Test
To ensure validity of journal entries created in the daily that may indicate a potential control breakdown. Identify all journal entries where the restricted word is found anywhere in the journal entry description field that may indicate an invalid or suspicious entry. Also identify where the JE description is less than the minimum description length. Keywords
Unusual JE's - Even Dollar Transactions
To ensure accuracy and validity of journal entries with even dollar amounts. In the previous period, identify all journal entries with even dollar transactions grouped by user ID based on the even dollar divisor and over the minimum threshold amount. The even dollar divisor defines the even dollar amount each transaction must be divisible by. Even Amounts
Frequently Reversed JE's
To ensure accuracy and validity of journal entries that reverse adjustments entered to general ledger accounts. Within a specific Investigation period based on the effective date, identify all journal entries that have matching DRs and CRs to the same GL account, with the same amount and same location that have been reversed multiple times over the number of journal entry reversals threshold. Reversals
JE Critical Data Fields
To ensure validity of journal entries where critical data elements deviate from expected values and formats. List all journal entries where critical data elements are either blank or deviate from expected values and formats. Data Quality
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