Finance and Accounts General Analytics – Internal Audit

 

Hi everyone, as a continuation of the previous article on analytics in P2P process and Order to Cash process, I am here to present you the same kind of analysis that can be performed in the area of finance and accounts.

 

 ALSO READ Order to Cash Analytics https://commercejob5.blogspot.com/2021/09/order-to-cash-o2c-analytics-internal.html

 

·        To check if there are any duplicate GLs in master data

o   To check the list of potential duplicate GLs from the master data based on same or similar account descriptions

 

·        Negative balances in ledger accounts

o   List down the general ledger accounts which have negative balances

 

·        To check if there are any inactive GLs in the chart of accounts

o   Check whether there were any inactive accounts, where the transactions were not recorded during the period

 

·        To check if there is significant movement in balance to respective GL account

o   Check whether there were significant movement in balance to respective GL based on the condition – Difference in closing balance of previous FY and current FY

 

·        Recording of duplicate entries

o   Identify any duplicate journal entries by comparing the same account and amount (Same account [GL code] + same amount)

o   Identify any duplicate journal entries by comparing the same journal entry number and amount (same account [GL code] + same amount + same narration / description)

 

·        To check on the potential bogus entries

o   Journal entries (Basic amount in INR) ending with ‘999

o   Journal entries (Basic amount in INR) ending with ‘000

 

·        Suspicious weekend or holiday journal entries

o   Analyse any or all journal entries created / posted on unusual dates such as weekend (Saturday / Sunday) or holiday.

 

·        Backdating of entries

o   Check whether there were any significant backdating of journal entries based on the following conditions – difference in entry date and posting date

 

·        To check for negative cash balance during the period

o   List of days when the closing balance of cash on hand account is negative

 

·        In active or non-operative bank accounts

o   Check for in active bank accounts based on utilisation of the bank accounts

 

·        To check if there is any cheque issued against the bank having insufficient funds

o   Check for any instances where the cheque issued to the creditor were returned due to insufficiency of funds with the following conditions – use a key word “insufficient fund” in the bank statement to identify the list of cheques returned back due to insufficiency of funds

 

·        To check for entries pertaining to prior period / entries not pertaining to the audit period

o   To check for entries pertaining to prior period / entries not pertaining to the audit period

ALSO READ Order to Cash Analytics https://commercejob5.blogspot.com/2021/09/order-to-cash-o2c-analytics-internal.html

Order To Cash (O2C) Analytics – Internal Audit

 

Hi everyone, as a continuation of the previous article on analytics in P2P process, I am here to present you the same kind of analysis that can be performed in Order To Cash process.

ALSO READ PROCURE TO PAY ANALYTICS HERE https://commercejob5.blogspot.com/2021/09/procure-to-pay-p2p-internal-audit.html

 

·        To Check if there are any duplicate customer codes in master data

To check if there are any multiple customer / duplicate accounts created with the following details

o   Customer name + company code + Same address + Different customer code

 

·        To check on the potential bogus transactions

o   Sales transactions (Basic amount in INR) ending with ‘999

o   Sales transactions (Basic amount in INR) ending with ‘000

 

·        Transactions with default suppliers

o   Sales transactions with customers identified by RBI and MCA as parties in default

 

·        High value sales return made at the start of the quarter

o   Check whether there are any high value sales returns made at the start of the quarter. This may be as a result of bogus sales booked at the end of the previous quarter to window dress the financials

 

·        Transactions with related parties or with parties of interest

o   Observe carefully of any sales made to related parties and to parties of interest to check if they are carried on at arm’s length price

 

 

·        High unit price variations (Trend analysis)

o   Same material sold to same customer at different price (Same material code + same customer code and name)

o   Same material procured from different vendors at different price (Same material code + Different customer code and name)

 

·        Transactions with customers who have outstanding for more than 180 days

o   Check if there are any transactions with customers whose balance is outstanding for more than 180 days (long pending dues) using invoice date and credit period given, if any

 

·        To check on the excess dispatch of finished goods

o   Perform reconciliation of outward weighment report at the plant (at the time FG moves out of the plant) against the invoice quantity with the following details

o   Exact vendor code + same material code

ALSO READ PROCURE TO PAY ANALYTICS HERE https://commercejob5.blogspot.com/2021/09/procure-to-pay-p2p-internal-audit.html

Procure To Pay (P2P) Internal audit - General Data analytics - Part II

 

Hi everyone, in this article you can find the common data analytics that can be performed in internal audit of Procure To Pay (P2P) process. The entire article contains around 30 key data analytics w.r.t P2P process in two parts (part I &II).

ALSO READ PART I HERE 

·        Inadequate price discovery

Compare the material prices with prices available on internet and provide results with deviations

 

·        Inadequate price negotiations with suppliers

Identify prices that have never changed for a considerable number of days

 

·        Splitting POs to by pass approval matrix – check for multiple POs with the same supplier in same time frame

To check if the multiple POs are created with the following conditions

o   Same PO (Provide an option to increase the number of days + same vendor code and name + Different POs 

 

·        Gap in the purchase order numbers in the PO dump

Check for any gap between sequential number in the purchase orders from the purchase register

 

·        To check if a PO has been created for the same material for which a previous PO is still open

To check the following combinations of PO has been created, while the PO of the same combination is still open

o   Same material + same vendor + different document + GRN date of the first PO is after the subsequent PO date 

 

·        Purchase order created post receipt of materials

Compare the PO details with respective GRN, to check on the following discrepancies

o   PO creation date = GRN date

o   PO creation date > GRN date 

 

·        PR and PO is created by the same user

Identify the cases where the user who has created the PO is as same as the user who created the PR

 

·        Duplicate Invoices

To check if the same invoices are recorded twice. Use the following logic for the conditions mentioned.

o   Same vendor code + same vendor invoice number + same GRN + same material code + same PO number + same document date 

 

·        To check if there any potential bonus purchase returns

Mapping purchase returns to the actual purchase transactions made with the following combinations

o   Same vendor number + same material code + same vendor invoice number + same GRN + negative of purchase value

 

·        Duplicate payments

To check if there is any duplicate payment made with the following combinations

o   Exact vendor code + same invoice number

 

·        To check on the availment of credit period

To check if any payments are made to the supplier prior to the payment due date

o   Pay term / payment due date (net due date) Vs payment date

ALSO READ PART I HERE 

Procure To Pay (P2P) Internal audit - General Data analytics - Part I

 Hi everyone, in this article you can find the common data analytics that can be performed in internal audit of Procure To Pay (P2P) process. The entire article contains around 30 key data analytics w.r.t P2P process in two parts (part I &II).

 

ALSO READ PART II HERE

• To check if there are incorrect or incomplete details in vendor master

To check if there are any incomplete /  incorrect details in the following fields

• Supplier name
• Address (street, city, district)
• Telephone
• Bank Details

 

• To check if there are any incomplete / incorrect statutory details in vendor master

To check if there are any discrepancies in statutory details like

• Invalid PAN
• GST number not updated
• Invalid GST
• PAN in GST number is not matching with PAN submitted
• State code in GST number is not matching with state code of address given
• PAN not updated

 

• To check if there are any duplicate vendor codes in supplier master data

To check if there are any duplicate supplier accounts created to be identified with the following logic

• Output 1 (High probability) - supplier name + company code + same bank details + same address
• Output 2 (Medium probability) - Supplier name + company code + same address
• Output 3 (Low probability) - Supplier name + Company code

 

 

• To check payroll employees matching with the vendor master 

To check if there is any supplier account created with the employee details matching with the below combinations

• Output 1 - Name match
• Output 2 - Address match
• Output 3 - Bank details match
• Output 4 - PAN details match

 

• To check vendors with negative balance

List of vendors with negative balance

 

• To check vendors with advances pending to be knocked off

 From the list of transactions identify advances paid but are pending to be knocked off against a corresponding invoice

 

• To identify list of vendors who have been block listed by various statutory authorities

Compare supplier list with the willful defaulters list published by RBI / FATF

 

• To check timely creation, approval, accuracy and completeness of purchase order

To check Turnaround time (TAT) of creation of purchase order (PO creation date vs PR approval date) 

 

• Purchase order profiling

Visualization  proving insights into the following

• Top suppliers
• Top materials 
• Movement of supplier cost over the period
• Number of Purchase orders
• Number of Open PO's
• User creating the PO and user approving the PO 

 

·        To check timely creation, approval, accuracy and completeness of purchase order

To check turnaround time of approving the purchase order. (PO approval date vs PO creation date)

 

·        To check timely creation, approval, accuracy and completeness of purchase order

Compare material wise PO details with PR, to check on the following discrepancies

• Total PO quantity of the material > PR quantity 

 

 

• PO created for cancelled / rejected / unapproved PR

To check whether PO has been created for cancelled / rejected / unapproved PR

 

• Unauthorized creation of PO

Compare the PO details with respective PR's to check on the following discrepancies

• Total PO quantity of the material < PR quantity

 

 

•  Purchase order raised without corresponding PR

To check if a PO was created without a corresponding Purchase requisition

 

• High unit price variations (trend analysis)
• Same material procured from same vendor at different price
• Same material procured from different vendors at different price 

 

ALSO READ PART II HERE