Overview
Only have a trial balance? Audit Sight still provides a workflow to support your team.
This article explains how the Trial-Balance-Only (TB-only) Cash Proof works and what to expect from the workflow.
Background
The Trial-Balance-Only (TB-only) Cash Proof is designed for engagements where summarized trial balance data is available, but detailed general ledger activity is not.
Warning: When only trial balance data is available, the proof may still contain material variances that require additional manual investigation and supporting procedures.
The TB-only Cash Proof still provides meaningful insight into:
- Banking activity
- Balance sheet movement
- Non-cash revenue and expense activity
- Potential non-operating activity
- Transfers and sweep identification based on bank transaction descriptions
How the TB-Only Cash Proof Works
At a high level, the solution identifies three major categories of reconciling activity:
- Changes in key balance sheet accounts
- Non-cash revenue and expense activity based on trial balance accounts
- Bank transfers and sweep activity identified from banking data
Below is additional detail on each category.
1. Changes in Key Balance Sheet Accounts
The workpaper calculates changes in specific balance sheet accounts to help explain differences between bank activity and reported book activity.
Revenue-Related Balance Sheet Changes
| Account | Fully Qualified Category (FQC) |
|---|---|
| Cash → Undeposited Funds | asset:current:undepositedFunds |
| Accounts Receivable | asset:current:accountsReceivable |
| Accounts Receivable → Allowance for Doubtful Accounts | asset:current:accountsReceivable:allowanceForDoubtfulAccounts |
| Other → Billings in Excess of Cost | liability:current:other:billingsInExcessOfCost |
| Other → Customer Deposits | liability:current:other:customerDeposits |
| Other → Deferred Revenue | liability:current:other:deferredRevenue |
Expense-Related Balance Sheet Changes
| Account | Fully Qualified Category (FQC) |
|---|---|
| Cash → Non-Bank Account | asset:current:cashNonBankAccounts |
| Inventory | asset:current:inventory |
| Prepaid Expenses | asset:current:prepaidExpenses |
| Accounts Payable | liability:current:accountsPayable |
| Credit Card Payable | liability:current:creditCardPayable |
| Payroll Liabilities | liability:current:payrollLiability |
| Tax | liability:current:tax |
| Other | liability:current:other |
| Other → Accrued | liability:current:other:accrued |
| Tax (Noncurrent) | liability:noncurrent:tax |
2. Non-Cash Revenue and Expense Activity
The TB-only Cash Proof identifies non-cash revenue and expense activity using Fully Qualified Categories (FQCs).
Non-Cash Revenue Activity
| Category | Fully Qualified Category (FQC) |
|---|---|
| Non-Operating Income | income:nonOperating |
Non-Cash Expense Activity
| Category | Fully Qualified Category (FQC) |
|---|---|
| Depreciation | asset:nonCurrent:fixed:accumulatedDepreciation |
| Amortization | expense:operating:amortization |
| Bad Debt Expense | expense:operating:badDebt |
| Gain or Loss on Fixed Assets | expense:nonOperating:gainLossOnFixedAsset |
| Other Non-Operating Expense | expense:nonOperating |
These categories help separate:
- Operating cash activity
- Non-cash accounting activity
- Non-operating activity
This improves visibility into true operating cash flow.
3. Organization of Banking Data
The TB-only workflow organizes banking transactions into meaningful groups and categories to support manual identification of banking-only reconciling items.
Each bank transaction is assigned:
- A Group
- A Category
Group
A Group represents a keyword or pattern unique to the client’s banking activity.
Using Groups and Categories together allows teams to:
- Identify trends
- Investigate unusual activity
- Analyze recurring transaction behavior
- Build banking-only reconciling items
Bank Transfer Matching
Bank transactions identified as transfers are automatically matched to offsetting transactions.
This helps identify:
- Internal fund movement
- Treasury sweeps
- Bank-to-bank transfers
This reduces noise and improves visibility into true operating cash activity.
Highlight Unusual Banking Patterns
The TB-only workflow also highlights:
- Large unexplained inflows or outflows
- Unusual transfer behavior
- Potential non-operating transactions
- Significant fluctuations in banking activity
These insights can help direct additional audit or diligence procedures.
What to Expect From the Initial TB-Only Cash Proof
The TB-only Cash Proof should generally be viewed as:
- A structured framework
- An accelerated starting point
- A workpaper supplemented with manual procedures
Because transaction-level accounting detail is unavailable, teams commonly layer in:
- Bank reconciliations
- Rollforwards
- Manual reconciling items
- Additional investigative procedures
Common Supplemental Procedures
Bank Reconciliation Layering
Teams often overlay:
- Monthly bank reconciliations
- Client-prepared reconciliation schedules
- Supporting schedules
Key Account Rollforwards
Typical supplemental rollforwards include:
- Debt
- Fixed Assets
- Equity
- Deferred Revenue
- Accrued liabilities
Investigation of Bank Buckets
Teams commonly investigate:
- Large transaction groups
- Sweep accounts
- Treasury activity
- Non-operating transactions
- Unusual cash movement
Important Limitations
Without detailed GL activity, the TB-only Cash Proof cannot:
- Map individual journal entries
- Build transaction-level reconciling items
- Roll forward accounting reconciling items
- Directly match GL debits and credits to bank activity
The TB-only workflow should therefore be viewed as:
- An analytical accelerator
- A structured framework
- A starting point for additional investigation
Rather than a fully automated transaction-level reconciliation.
FAQs
Can I use TB-only entities in the same workpaper as standard entities?
Yes. A single workpaper can contain:
- Standard entities with full GL detail
- TB-only entities
The workpaper automatically applies the correct logic to each entity.
What should I expect the variance to be?
It depends on how clean the accounting records are.
If reconciling items are not clearly identifiable within:
- Banking activity
- Trial balance balances
- Non-operating activity
Then material variances can still occur.
Cleaner books generally produce smaller unexplained variances.
Why use Cash Proof Advanced for TB-only engagements?
The Advanced Cash Proof contains enhanced logic not available in the Standard Cash Proof.
It helps teams:
- Organize banking data
- Identify transfers and sweeps
- Separate non-cash activity
- Highlight unusual banking patterns
- Accelerate cash proof testing
How do I upload the data?
See the existing TB-only upload article for upload instructions and formatting requirements.
Uploading Monthly Trial Balances (Trial Balance–Only Upload Option)
