Validis Audit Program Guide

Use the comparing periods procedure on the Income statement (detailed).

Select Add Comparison, choose Year to date and the interim date you are reviewing, then Confirm. Repeat to add the equivalent interim period for the prior year if you want the comparative.

Remove any full year columns you do not need using the circled cross in the column header, so only the interim data remains. Expand All opens every category to account level, Variances adds the change between the periods on screen, and Download Report exports the result to Excel.

Income statement (detailed). Add the interim period you are reviewing.

Choose Year to date and the interim date, then select Confirm.

Use the comparing periods procedure on the Income statement (detailed), and on the Balance Sheet (detailed) if your analytics cover balance sheet accounts.

Add the current period, either a year to date interim or the full year, alongside the prior period you are comparing against. Remove any columns you do not need, then select Variances to show the value and percentage movement between them. Expand All takes the comparison down to individual accounts.

Download Report gives you the same comparison in Excel to document in your workpapers.

Income statement (detailed), current period against the comparative.

Select General Ledger, then the Bank Accounts tab. Each bank and cash account is listed with its opening balance, movement and closing balance for the selected period.

Bank Accounts, with the date selector and Download Report above the table.

Set the date range so it spans the year end, from the last month of the fiscal year to the first month of the following year. That gives you every receipt and disbursement either side of the balance sheet date in one view.

Select the account you want to review.

Select the account you want to review.

The Transaction Data Viewer opens with every entry on that account for the period, each with its transaction number, type, date, account code and name, reference, description and amount. Sort by date to examine the entries closest to the year end, by amount to surface large items, or by type to spot transaction types that are unusual for a cash account. Download Report exports the listing to Excel for documentation.

Bank account activity for the selected period, ready to sort or export.

The Standard Reporting Pack also contains a Cash-Report workbook, which holds the cash analysis for the period, including bank transfer activity.

For the high level comparison, use the comparing periods procedure on the Balance Sheet (detailed). Select Expand All, or open the Current Assets toggle, to reach the trade receivables accounts, then Variances for the year on year change.

For a more detailed comparison, generate a Standard Reporting Pack and open the AR-Report workbook, which carries the receivables analysis sheets.

Balance Sheet (detailed). Expand All reaches the trade receivables accounts.

Both ratios need the receivables balance and revenue for the same period.

Take the receivables balance from the Balance Sheet (detailed) and revenue from the Income statement (detailed), using the comparing periods procedure to put the current and prior periods side by side.

The AR-Report workbook in the Standard Reporting Pack carries the receivables analysis for the period, so generate the pack for the period you are auditing and work from that where you want the figures already assembled.

Balance Sheet (detailed) gives the receivables balance for each period.

Income statement (detailed) gives revenue for the same periods.

This step has two sources. The quickest is the portal, and the fullest is the reporting pack.

In the portal, select Receivables Ledger, then the Aged Receivables tab. Every customer is listed with their outstanding balance split into ageing buckets, with a total column and a total row.

Aged Receivables, balances split by ageing period.

Use the Period Ageing control to change how the buckets are calculated, and the search box to find a specific customer. Sort on any column to bring the largest or oldest balances to the top.

For invoice level detail, open the Detailed Aged Receivables tab, which gives the same customers broken down to individual invoices and other activity. Download Report exports either view to Excel.

The AR-Report workbook in the Standard Reporting Pack carries the same views as sheets, including Aged Receivables, Detailed Aged Receivables and Receivables Open Items List.

The AR-Report sheet tabs. Use the arrows at the left of the strip to reach tabs that are scrolled out of view.

Receivables Open Items List, every invoice still outstanding at the period end.

Take the allowance for doubtful accounts from the Balance Sheet (detailed), using Expand All to reach it under current assets, and the gross receivables total from the Aged Receivables tab in the Receivables Ledger.

Using the comparing periods procedure on the balance sheet puts the current and prior periods side by side, so the percentage can be calculated on the same basis for each year and compared.

The AR-Report workbook in the Standard Reporting Pack carries the receivables analysis for the period if you would rather work from the pack.

Balance Sheet (detailed). The allowance sits under current assets once expanded.

Select Receivables Ledger, then Aged Receivables. Each ageing bucket has its own column, with an Older column for anything beyond the oldest named period and a Total column. The total row at the foot of the table gives the figure for each bucket across all customers.

The ageing columns and the total row, which give each bucket and the overall total.

Those totals are what you need. Divide each bucket total by the overall total to get the percentage. Download Report exports the table to Excel so the calculation can be documented.

Use the general ledger transactions procedure for the full audit year.

In the export, filter the COA Category column to revenue. The COA Sub-Category and Transaction Category columns then let you group revenue further without needing to know the client chart of accounts.

Where the client records revenue by class, such as product line or location, that identifier appears in the class column at the end of the sheet. Filter or pivot on it to build the schedule. The Date column lets you split the schedule into months or quarters.

Reconcile your total back to revenue on the Income statement (detailed) for the same period.

GL Transactions tab. Set the date range, then Download Report.

Filter the COA Category column to revenue, then group by the category columns.

Generate a Standard Reporting Pack and open the AR-Report workbook. Move along the sheet tabs to Sales Invoices, a listing of every revenue transaction in the period with its date, customer identifier, reference, currency and amount.

The Sales Invoices sheet in the AR-Report workbook.

Sort by amount to bring the largest transactions to the top, and by date to isolate the days either side of the period end. Both are usually worth doing.

Use the comparing periods procedure on the Balance Sheet (detailed). It gives receivables, current assets, total assets and capital and reserves in a single view, for as many periods as you add.

Select Expand All to reach the receivables accounts, then calculate each ratio from the figures on screen. Download Report exports the comparison so the calculation can be documented for each period.

The AR-Report workbook in the Standard Reporting Pack carries the receivables analysis for the period as an alternative source.

Balance Sheet (detailed) carries receivables, current assets, total assets and reserves in one view.

Use the ledger control procedure on the Receivables Ledger Control tab.

Set the date selector to a range that runs past the year end, so the months following the balance sheet date appear in the report. Each of those months shows the cash, credits and journals posted against receivables.

Select the figure for the month you want to examine. The Transaction Data Viewer opens with filters for Cash, Credit Notes, Write Offs and Refunds, which are the subsequent collections, credit memos and write-offs the step asks for. Each filter carries its own total, and a filter with no activity is greyed out. Download Report exports the filtered list.

Transaction Data Viewer on the receivables side, filtered to credit notes.

Compare that activity against the Detailed Aged Receivables balances at the year end to see which aged items were subsequently settled.

Generate a Standard Reporting Pack and open the AR-Report workbook, then the Sales Invoices sheet shown in section 10. This is the sales journal for the period.

Reconcile the sheet total back to revenue on the Income statement (detailed) for the same period. Where the two do not agree, the general ledger transactions export lets you isolate revenue postings that did not originate in the sales ledger.

The Sales Invoices sheet is the sales journal for the period.

Use the comparing periods procedure on the Income statement (detailed).

Remove the default year columns using the circled cross in each header. Then select Add Comparison and choose the financial period rather than the year, picking the last month of the audit year. Repeat for the first month after the year end, and again for the full year if you want to compare the final month against the rest of the year.

Expand All brings the revenue accounts into view and Variances quantifies the movement between the months on screen.

The period type selector. Choose Period rather than Year for a month by month comparison.

Income statement (detailed). The layout is the same once you add months in place of years.

Use the ledger control procedure on the Receivables Ledger Control tab, with the date range set to cover several months before and after the year end.

The Credits column gives the credit activity for each of those months, so the trend either side of the year end can be read straight from the report. Select a figure to open the Transaction Data Viewer and use the Credit Notes, Refunds and Write Offs filters to see the individual items behind it.

Transaction Data Viewer on the receivables side, filtered to credit notes.

Use the Trial Balance procedure. The debit and credit totals are shown in the total row at the foot of the table and should agree.

To recalculate independently, select Download Report and sum the debit and credit columns in Excel.

The Trial Balance totals, which should agree.

This step builds a rollforward, so you need three downloads.

Using the Trial Balance procedure, download the trial balance for the current audit year, then change the date selector to the prior audit year and download it again. That gives you the opening and closing positions.

Then use the general ledger transactions procedure for the full current audit year. This is the movement.

In Excel, add the current year transaction totals per account to the prior year trial balance and agree the result to the current year trial balance. Any account that does not reconcile points to entries missing from one of the three files.

The transactions export also carries Created User Name and Posted User Name, which is what you need if you are also testing entries for appropriate segregation of duties.

Download the Trial Balance for the current year, then again for the prior year.

The transactions export supplies the movement between the two.

Use the comparing periods procedure on the Balance Sheet (detailed). Select Expand All to find the inventory accounts under current assets, then Variances for the value and percentage change.

Two periods are shown by default. Use Add Comparison to bring in further years where the step calls for a longer trend.

Balance Sheet (detailed). Expand All reaches the inventory accounts under current assets.

Generate a Standard Reporting Pack and open the Inventory-Report workbook. The first sheet, Inventory Comparison Analysis, has the turnover already calculated.

Inventory Comparison Analysis, with the inventory turnover ratio and its year on year variance.

The sheet gives the inventory balance, cost of goods sold and average inventory balance for each year, then the resulting Inventory Turnover Ratio, with variance and variance percentage columns between the periods. The second sheet, Sales Ledger Control Analysis, carries the related sales ledger movement.

Use the comparing periods procedure on the Income statement (detailed), selecting financial periods rather than years.

Add the last month of the audit year and the first month after the year end, then select Expand All to bring cost of revenue into view. Variances gives the movement between the two months.

Choose Period, then add the last month of the year and the first month after it.

Income statement (detailed). Expand All brings cost of revenue into view.

Select General Ledger, then the Bank Accounts tab shown in section 3, and set the date range to the last month of the fiscal period. Select the cash account you want to review.

Sort on the transaction type column to group the payments together, then read the cheque numbers from the reference column. Sorting by date within that grouping gives you the last cheques written before the period end.

Transaction type labels come from the client accounting system, so the wording varies between packages.

Bank Accounts, with the date range set to the last month of the fiscal period.

Sort on the type column to group the payments, then read the cheque numbers from the reference column.

Use the comparing periods procedure on the Income statement (detailed), adding the last month of the audit year and the first month of the subsequent period as financial periods.

Gross profit is shown as a subtotal once revenue and cost of revenue are on screen. Variances quantifies the movement between the two months, which is the cut-off indicator the step is looking for.

Income statement (detailed). Gross profit appears as a subtotal once revenue and cost of revenue are on screen.

Generate a Standard Reporting Pack and open the Property-Report workbook.

The first sheet, Fixed Asset Summary And Analysis, gives every property and related depreciation account with its opening balance, debit movement, credit movement and closing balance, grouped by asset class.

Fixed Asset Summary And Analysis, opening and closing balances with the movement in each account.

The second sheet, Fixed Asset Movements, lists the individual transactions behind those movements, with the transaction number, line number, type, financial year and period, date, creation date and the user who created the entry.

Fixed Asset Movements, the transactions behind each account movement.

Between them the two sheets give the schedule the step asks for. Depreciation methods and useful lives are not held in the accounting data, so take those from the client.

Work from the Fixed Asset Summary And Analysis sheet shown in section 23.

The depreciation and amortisation accounts sit directly beneath the cost accounts they relate to, each with its own opening and closing balance and the movement for the year. The charge for the year is the movement on the depreciation account, and the related asset base is the cost account balance.

Generate the pack for the prior period as well to calculate the same ratio on the same basis and compare the two.

The depreciation accounts sit beneath the cost accounts they relate to, each with its own movement.

Use the Trial Balance procedure. Enter the account name or number in the search box, then select the account to open its Account Summary with the opening balance, movement and closing balance for the period.

An account with no movement where you would expect one, such as an intangible with no amortisation charge, is what this step is looking for. The Account Summary answers that directly.

For the individual entries behind an account, use the general ledger transactions export and filter on the account code. That gives every line with its date, reference, details, amount and the user who created it.

The Other-Assets-Report workbook in the Standard Reporting Pack gives the same accounts already grouped. The Other Assets Analysis sheet lists them by category, prepayments, sundry debtors, suspense, directors loans and so on, with the current and prior year balances and the variance between them.

Other Assets Analysis, accounts grouped by category with the year on year variance.

A nil variance against a prior year balance is the quickest way to spot an account that has not moved.

Generate a Standard Reporting Pack and open the AP-Report workbook. Move along the sheet tabs to Payables Open Items List, which lists every payable outstanding at the period end with its type, date, due date, reference, supplier code and name, outstanding amount and currency.

The AP-Report sheet tabs.

The Payables Open Items List sheet in the AP-Report workbook.

Sort on the date column to bring the oldest items to the top, which is where unusual or long outstanding balances show up, and on the outstanding amount to surface the largest. The due date column identifies items already well past their terms.

The Detailed Aged Payables sheet in the same workbook gives the equivalent view split into ageing buckets.

Use the ledger control procedure on the Payables Ledger Control tab, with the date range extended to include the months after the year end.

Select the cash figure for the first month after the year end. The Transaction Data Viewer opens with the Cash filter available, which isolates the payments made in that month and gives their total.

Each payment shows the date, supplier code and name, reference, details and amount. Those are your disbursements after the balance sheet date. For each one you select for testing, check whether the goods or services were received on or before the year end and whether the liability was recorded.

Cross-refer to the Payables Open Items List shown in section 26 to confirm whether the item was already recorded as outstanding at the year end. Download Report exports the payment listing so your selection criteria can be documented.

Payables Ledger Control, with the range extended past the year end.

The Cash filter isolates the payments made in the selected month.

Use the Trial Balance procedure. Search by account name or number to find a specific accrual, or sort on the COA Category column to group the liability accounts together and scroll through them.

The page size control at the bottom of the table shows more than ten rows at a time, which makes scanning a long liability section faster. COA SUB-Category narrows the grouping further, separating accruals from payables and tax liabilities.

Select any account to see its opening balance, movement and closing balance, which is usually enough to decide whether it warrants further testing.

Trial Balance. Sort on COA Category to group the liability accounts.

Or search by account name or number to jump straight to an accrual.

Open the Payables Open Items List sheet in the AP-Report workbook, shown in section 26.

Sum the outstanding column across the whole sheet and agree the total to accounts payable on the Balance Sheet (detailed) for the same period, and to the closing balance on the Payables Ledger Control report.

Where a client trades in more than one currency, the sheet carries both the outstanding amount and the foreign currency outstanding amount, so make sure you are totalling the reporting currency column.

Sum the outstanding column and agree it to the balance sheet.

Open the Payables Open Items List sheet in the AP-Report workbook, shown in section 26.

Sort ascending on the outstanding column. Debit balances appear as negatives and sort to the top, which gives you the whole population in one pass. These are usually overpayments, unallocated payments or credit notes not yet applied, and may need reclassifying out of payables.

The type column tells you what each one is, and the supplier code lets you group several items against the same supplier.

Sort ascending on the outstanding column to bring debit balances to the top.

Generate a Standard Reporting Pack and open the LTD-Report workbook. The Long Term Debt Summary and Analysis sheet is a rollforward of every borrowing account from the prior year to the current year.

Long Term Debt Summary and Analysis, borrowings split between current and non-current liabilities.

Accounts are split between Current Liabilities and Non-Current Liabilities, then grouped into bank loans, hire purchase creditors, lease creditors, other capital obligations and other loans. Each account shows its opening balance, debit movement, credit movement and closing balance.

For the related interest expense, use the comparing periods procedure on the Income statement (detailed) and expand the financial charges section.

Use the comparing periods procedure on the Income statement (detailed), then select Expand All to open the operating expenses and financial charges and other income sections to account level.

For the comparison against prior periods, leave the default years in place and select Variances. For the month by month comparison, remove the year columns and use Add Comparison to add financial periods instead, adding the same month from the prior year alongside it.

Download Report exports whatever combination is on screen, so the analytic and the expectation can be documented together.

Income statement (detailed). Expand All opens operating expenses and financial charges to account level.

Use the general ledger transactions procedure for the full audit year.

Filter the COA Category column to the income and expense accounts you are interested in, then sort on Amount to bring the largest entries to the top. Sorting on Date isolates entries close to the period end.

The Details and Reference columns usually carry enough to identify the business purpose. Where they do not, the Cust/Supp Name column tells you who the entry was with, which is the starting point for identifying related party and other significant unusual transactions.

Created User Name and Posted Date are also on the sheet, which helps where an entry was posted outside the normal cycle.

The transactions export. Filter on COA Category, then sort on Amount.

Open the Payables Open Items List sheet in the AP-Report workbook, shown in section 26.

Sort on the supplier name column. Near identical names that sit next to each other once sorted are what this step is looking for, as are several codes sharing one name, or one code appearing under more than one name.

Sort on the reference column to spot consecutive invoice numbers from the same supplier, which is unusual for a genuine trading relationship.

For the full population rather than just open items, use the general ledger transactions export and work from the Cust/Supp Code and Cust/Supp Name columns. Supplier addresses and telephone numbers are not held in Validis, so take those from the client system.

Sort on the supplier name column to bring near identical names together.