Journal Entry Module

Audit Sight automates journal entry testing through the Journal Entry Module—allowing auditors to focus on risk assessment, professional judgment, and conclusions rather than manual data analysis.

What Is the Journal Entry Module?

The Journal Entry Module automates journal entry testing in accordance with SAS 99, helping auditors identify potential fraud risks and unusual activity within the general ledger.

The module is designed to:

• Identify unusual revenue and expense journal entries based on unexpected account offsets

• Perform completeness testing over the general ledger

By combining automation with auditor-defined expectations and performance materiality, the Journal Entry Module produces a focused, defensible testing population.

Audit Sight’s Point of View

Audit Sight is built around the idea that:

• Routine revenue and expense activity is validated through the Cash Proof module

• Balance sheet risk is heavily addressed through traditional audit procedures

As a result, residual fraud risk is most likely to surface through unusual journal entries impacting revenue or expenses. The Journal Entry Module is specifically designed to isolate and test this remaining risk.

How the Journal Entry Module Works

Audit Sight is a system-agnostic solution that allows journal entry testing to be performed on any client where a general ledger is available.

Step 1: Data Ingestion and Data Healing

When the general ledger is imported, Audit Sight performs a series of data-healing procedures to ensure the data is testable and consistent across clients.

This includes:

• Synthetic journal entry IDs

  • If the source data does not include journal entry IDs, Audit Sight automatically creates them using transaction dates and debit/credit relationships.

• Batch entry disaggregation

  • Batch journal entries are split into discrete, testable components to allow for more precise and targeted testing.

These processes ensure:

1. The Journal Entry Module can be run on every engagement where GL data is provided

2. Auditors can evaluate individual journal entry behavior rather than aggregated activity

Step 2: Automated Testing

Audit Sight applies a rules-based engine to analyze transactional-level journal entry data.

The system:

• Establishes expected vs. unexpected offsets for revenue and expense accounts

• Applies performance materiality to scope out immaterial offsets in aggregate

  • Materiality is applied using absolute values to prevent inappropriate netting

• Performs completeness testing to confirm all journal entries are included

All results are documented in a structured workpaper that can be reviewed, refined, and finalized by the auditor.

Requesting the Journal Entry Workpaper

Step 1: Navigate to Your Engagement

From the left-hand navigation, select Engagements and open the engagement where you want to perform journal entry testing.
Click Start to request the Journal Entry Module.

Step 2: Configure Your Journal Entry Request

When configuring the request, you will be prompted to:

1. Select the report date range

2. Select the testing focus:

   • Completeness Testing – Confirms the journal entry population is complete (required for all engagements)

   • Unusual Revenue – Revenue entries with unexpected offsets

   • Unusual Expenses – Expense entries with unexpected offsets

3. Enter performance materiality

   • Used to scope out immaterial offsets in aggregate while preserving audit coverage

4. Select the entities in scope

   

Note on Entities with Missing Data

Journal entry testing can be requested before all data is fully imported.
Audit Sight will automatically generate or refresh the workpaper once the missing data has been successfully processed.

Step 3: Review Mappings

Once processing is complete, you will be presented with the revenue and expense testing views.

Audit Sight automatically displays:

• All offsets to revenue and expense accounts

• Which offsets are classified as Expected or Unexpected

To update classifications:

• Toggle an account to Expected as needed

• Provide a required rationale for each expected account

  • Audit Sight includes pre-built example reasons to streamline documentation

After finalizing expected account mappings, click Save. A new workpaper will be generated using the updated scoping.

Step 4: Download the Workpaper and Begin Testing

Once the workpaper is generated, download it and begin your audit testing.

For a detailed walkthrough on how to review and conclude on the Journal Entry workpaper, refer to the next article in this series.