Proactive Journal Entry Testing

More Ways to Detect Illegal Entries


By Richard B. Lanza, CFE, CPA-CITP, PMP

Fear Not the Software   

In the November/December issue I explained the need for journal entry testing to thwart management override and detect financial statement fraud. At the end of that column, I explained how to perform two tests: (1) identifying journal entries posted on weekends and holidays and (2) extracting journal entries that equate to round multiples of 10,000, 100,000, and 1,000,000.

Here I'll explain eight additional journal entry tests that can be completed using Microsoft Excel and an inexpensive add-in to Excel: ActiveData for Excel.TM (To obtain a 30-day free license to ActiveData for Excel, see www.informationactive.com/ad/?aid=200.)

ORGANIZING THE EIGHT TESTS In the last column, I identified 16 reports that could be run on the general ledger and organized them into the five Ws. I explained how to do two of the 16 tests. Here are explanations for eight more tests:  

 

 

 

 

 


For full access to story, members may sign in here.

Not a member? Click here to Join Now. Or Click here to sign up for a FREE TRIAL.

Related Articles

Case in Point: Employee Embezzlement

Based on an interview with a company owner involved in an embezzlement case, a university instructor provides lessons for fraud examiners and business owners on embezzlement schemes.

Cash Larceny (Part 9)

One of the most basic cash register frauds involves losses of revenue associated with missing Z tape numbers. This article instructs fraud examiners on how to calculate the amount of loss from missing cash register Z tapes and provides lessons from cash register manipulation schemes that cashiers use to misappropriate funds.

Tone at the Top

This article highlights how executives can help prevent fraud in their organizations by promoting a positive work environment and conveying the message of corporate responsibility and accountability to employees, contractors, and investors.