The Journal Entry Workpaper (JE WP) is designed to help auditors assess journal entry completeness, scope journal entry testing, and determine whether additional audit procedures are required.
This article outlines the key review steps, required auditor actions, and documentation expectations when using the Journal Entry Workpaper.
Important:
Audit Sight supports — but does not replace — professional judgment. Auditors are responsible for evaluating outputs, performing appropriate procedures, and documenting conclusions.
Step 1: Review Completeness Results
Begin by reviewing the completeness results in the Journal Entry Workpaper.
What to Review
Confirm journal entry activity reconciles to the general ledger.
Identify any accounts where journal entry activity does not roll or reconcile as expected.
Auditor To-Do / Action Required
Identify material accounts that do not roll.
Perform additional completeness testing as necessary.
Document the results of completeness testing and conclusions reached.
Why This Matters
Completeness is foundational. If journal entry data is incomplete, downstream scoping and testing conclusions may not be complete.
Step 2: Review and Finalize Journal Entry Scoping
(Expected vs. Unexpected Accounts)
After completeness is assessed, review the scoping tabs in the Journal Entry Workpaper.
What to Review
Accounts are categorized as:
Expected Journal Entry Accounts
Unexpected Journal Entry Accounts
Auditor To-Do / Action Required
Review expected accounts and confirm the rationale is appropriate.
Determine whether any accounts classified as unexpected should be treated as expected based on client processes, nature of the account and prior-year knowledge
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If changes are needed:
Update expected account classifications in the Audit Sight UI
Regenerate the Journal Entry Workpaper with updated scoping
Best Practice
Finalize scoping before performing detailed journal entry testing to ensure testing is efficient.
Step 3: Audit the Unexpected Journal Entries
Once scoping is finalized, auditors should perform substantive procedures over unexpected journal entries.
Audit Sight supports two primary testing approaches. The appropriate method should be selected based on risk, materiality, and professional judgment.
Option 1: Test at the Combination Level
Journal entries are grouped using Combo IDs, which represent recurring debit and credit account combinations.
When to Use This Approach
High-volume journal entry populations
Consistent or recurring account combinations
Auditor To-Do / Action Required
Select combinations for testing.
Obtain support from the client
Document conclusions at the combination level.
Option 2: Test Individual Journal Entries
Journal entries are tested at the individual transaction level.
When to Use This Approach
Higher-risk engagements
Non-routine, manual, or judgmental entries
Auditor To-Do / Action Required
Select individual journal entries for testing.
Inspect supporting documentation.
Document conclusions for each entry tested.
Step 4: Conclude and Document Results
After testing is completed, auditors should evaluate whether journal entry risk has been appropriately addressed.
Auditor To-Do / Action Required
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Document conclusions related to:
Completeness
Scoping decisions
Unexpected journal entry testing
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Determine whether:
Additional procedures are required, or
Journal entry risk can be concluded
Retain supporting documentation in accordance with firm methodology.
Key Takeaways
Start with completeness
Finalize expected vs. unexpected scoping
Test unexpected entries using a combination-level or transaction-level approach
Clearly document actions, judgments, and conclusions
Need Help?
If you have questions about reviewing the Journal Entry Workpaper or adjusting scoping within Audit Sight, please contact support@auditsight.com.
