General Ledger Entries

Overview/Narrative

General Ledger Entries should be carefully reviewed, and several tests can and should be performed as part of the analytical review process:

1. Are general ledger entries being made on weekends or Federal holidays?
2. In the aggregate, which accounts have the most activity (e.g. clearing accounts)? Is this activity expected?
3. What are the largest and smallest amounts being individually posted?

Audit Objective

The objective is to determine the overall reasonableness of journal entries and that the entries are authorized.

Audit Procedures / Audit Program

1. Obtain journal entry transaction data in electronic format, note data elements.
2. Sort the data by journal entry number.
3. Summarize all journal entries by account, separated by debit and credit.
3. Prepare a schedule of all journal entries which originated on either a weekend or a federal holiday.
4. Prepare a schedule of the five largest and five smallest entries, both debit and credit.
5. Review the scheduled transactions to ensure source documents had been reviewed and approved and adequate support or explanation for the entry exists.
5. For the account summary data, determine that the accounts used appear appropriate.

6. Write a report explaining your observations, and provide conclusions and recommendations.

Example Data (Excel and Flat File)

Excel WorkBook Sheet "Holiday JE"
Tab separated file je.tab

Scripts to do the Data Extraction

The check is performed using the ScriptBasic routines weekend.sb (to check weekend dates) and/or holidays.sb (to check federal holidays). (Note: there are other scripts of audit interest at the Audit Script Page, available in both setup format and as a zip file).

The script is invoked from the DOS command line as follows:

Assuming that you are running from the directory where the data files are contained, and that:

input file is named je.tab
desired output (extract) file is jewknd.txt
variable (date) tested is named JEDate
length of the year portion of the date is 4, i.e. mm/dd/yyyy

Then the command would be as follows:

scriba.exe weekend.sb i=je.tab o=jewknd.txt v=JEDate yl=4

Output from the extract will be those journal entries made on a weekend
output from the command will be:

accepted cmd i=je.tab o=jewkend.txt v=JEDate yl=4
Arg 0 has value i=je.tab
Arg 1 has value o=jewkend.txt
Arg 2 has value v=JEDate
Arg 3 has value yl=4
infile is je.tab
outfile is jewkend.txt
varname is JEDate
Year length is 4
column of varname is 2
File processed was je.tab
Selection counts are 644
File contains 2491 rows
Selection results, consisting of 644 records, were written to jewkend.txt
normal eoj...

Performing the check for Federal Holidays is almost the same

DOS command is:

scriba.exe holidays.sb i=je.tab o=jehol.txt v=JEDate yl=4

Output from the command is the extracted file and the following text displayed:

accepted cmd i=je.tab o=jehol.txt v=JEDate yl=4
Arg 0 has value i=je.tab
Arg 1 has value o=jehol.txt
Arg 2 has value v=JEDate
Arg 3 has value yl=4
infile is je.tab
outfile is jehol.txt
varname is JEDate
Year length is 4
column of varname is 2
File processed was je.tab
Selection counts are 143
File contains 2491 rows
Selection results, consisting of 143 records, were written to jehol.txt
normal eoj...

The current set of holiday dates are the Federal holidays from 1/1/2002 to 12/25/2007. If you need to have a different set of dates processed as holidays, then perform the following procedures:

Open the Excel workbook JE.xls
Go to the Sheet named "Fed Holidays" and modify the first column as appropriate
Save the sheet only as a tab separated file
Using the ScriptBasic program blddates.sb, read this file and produce an output file named "sbdates.txt" which will be stored in the directory where the holidays.sb routine is stored (i.e. replace the current one)

Description of Analytical Procedures Performed

First sort the file provided (je.tab) in Journal Entry number Sequence
This can be done by opening the file in Excel, sorting and then saving as a tab separated file, or else use EZ-R Stats for Windows Tools | Sort and specify the input file as "je.tab", the output file as "jesort.tab" and the sort key as JENumber.

Using Ez_R Stats for Windows, choose the menu option Tools | Summarize.
Specify input file "jesort.tab", output file "JEsum.tab".

Variable to be tested will be Amount.

Using Ez_R Stats for Windows, choose the menu option Tools | Pareto.
Specify input file "jesort.tab", output file "JEpareto.tab".

Variable to be tested will be Account.

Click the "Run" button to process the file and obtain the output.