Continuous auditing with excel

It is possible to conduct ongoing audits of many processes with a simple download of data that can be viewed in an Excel spreadsheet. This approach reduces the need for more formal internal audits that require greater resources to complete, and which may only be conducted at relatively long intervals.

Here are examples of several audit tests that can be conducted with an electronic spreadsheet:

  • Sort the spreadsheet based on the time and date stamps for transactions, to see if any items were recorded during unusual time periods when no one should have been accessing the system.
  • Sort the spreadsheet by supplier and then by user ID number within each supplier. The intent is to locate any situations where the same person always enters every transaction related to a specific supplier. This can indicate that the person has fraudulently created a shell company, and is creating fake invoices from this supplier.
  • Sort payables transactions by the amount paid, and scan through the payments that are somewhat below the company's threshold level for invoices that require approval. The intent is to locate invoices that may have been fraudulently created to avoid an approval.
  • Extract customer invoices into a spreadsheet and sort it for items that are overdue for payment. Then sort this subset for items that do not have a credit approval flag. If there is no flag, sort yet again by the amount of the customer order. The intent is to find any customer orders that were either inadvertently or fraudulently routed around the credit department.

These sample audit tests show how easy it is to routinely conduct audits by extracting information from company systems and sorting it in various ways on an electronic spreadsheet. This approach can be used on a more formal basis to examine the more high-risk transactions on a recurring basis, which increases the odds that control issues can be found promptly.