Consistency checks - Review Points
Checkmybooks looks for inconsistencies in the client's accounting records which suggest that errors or omissions have been made.
Postings distributed to several different general ledger accounts
Looking for transactions posted inconsistently.
Purchase invoices from Lawyers & Co posted to Professional Fees, Sundries, Legal Expenses and Rent and Rates.
Looks for purchase invoices from the same supplier posted to more than one general ledger account.
"There are 9 postings for Lawyers & Co posted to 4 accounts".
Asset accounts that have a balance not consistent with their type
Looking for account balances that are inconsistent with their account type.
A Bank Loan Account which has a debit balance at the year-end date.
Looks for asset accounts with a credit balance at the year-end date and liability accounts that have a debit balance at the year-end date.
"Prepayments is an asset account but has a credit balance".
Transactions with a VAT code different to others in that account
Looking for transactions where the VAT treatment may be incorrect or that have been posted to the wrong account.
A bank payment in the Insurance account with VAT at 20%.
Looks for transactions in an account which have a VAT code different to most of the others in that account - using standard deviation.
"There are 3 postings in Rent and Rates that have a VAT code different to most of the others".
Transactions which are unusually high or low for the account
Looking for transactions of an amount that seems inconsistent with the other transactions in that account.
A receipt of £5,000 in Commission Received when the other receipts are for less than £10.
Looks for transactions in an account which have an amount much larger or smaller to most of the others in that account - using standard deviation.
"There are 7 postings in Sales Promotions that seem large compared to others".