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:
Request a detailed year-to-date GL report in electronic form, including detailed transactions with user input information.
Using the same GL database of approximately 1,700 records, an intermediate-level user measured the amount of time required to generate these queries using three different applications.
Using CaseWare IDEA, queries can be performed quickly using “Criteria” and “Direct Extraction.” The queries are produced one at a time, which requires additional time when compared to SmartAnalyzer, an add-on component for IDEA. Also, depending on the type of report the user generates, there is additional time required to export the data from IDEA into Excel.
SmartAnalyzer is a set of pre-defined tests and reports, which allows the user to quickly perform the queries listed above. It enables the user to run multiple queries simultaneously while significantly reducing potential for human error.
While the data set used in this example is rather small, larger data sets can take significantly more time and require more manual work. IDEA users who have invested in SmartAnalyzer will save the most time, including the added benefit of having data request assistance, plus automatic documentation for the audit objective and results of each test.
SmartAnalyzer also allows users to tag fields within the database to rerun the same tests in the next period. For example, if the user runs the same reports each month, it will take approximately 45 minutes. Using the tagging feature in SmartAnalyzer, the same report rerun would take less than 10 minutes.
While there are many tools you can use to analyze the general ledger, our comparison tests show SmartAnalyzer can help perform the same queries in less time, and with greater accuracy.
The Marketplace is a critical component of an Auditors toolkit. It offers affordable, on-demand access to time-saving technologies.
To access the Marketplace: Open IDEA and select the SmartAnalyzer ribbon. Click on the “Marketplace” icon in the Apps section of the ribbon. If you do not have an SEL, you may browse the Marketplace and contact [email protected] to purchase SmartAnalyzer. Please note, concurrent licenses and multi-user single user licenses (e.g., Corporate or Branded), all users must be licensed for the Apps selected.
IDEA users can also purchase the full suite of 55+ tests currently available in SmartAnlayzer Financial to quickly assess risks within accounts receivable, accounts payable, fixed assets and inventory, in addition to the general ledger.
Where to Try & Buy
With the release of IDEA Version Nine, CaseWare introduced Marketplace where IDEA users can easily purchase add-ons and components. Version Nine includes a few SmartAnalyzer General Ledger sample tests, which supported users can download and try. Single User Electronic License (SEL) users can download the SmartAnalyzer General Ledger app directly from the Marketplace. IDEA users with other license types can purchase directly from Audimation Services by contacting [email protected].
IDEA is a registered trademark of CaseWare International Inc.