Why Journal entry testing matters to internal audit and controllers
Journal entries are the easiest place to override other controls. Auditing standards, including the PCAOB's AS 2401 and ISA 240, require auditors to test them for signs of fraud.
Common tests flag entries posted on weekends or after the period closed, round amounts, rarely used accounts, missing descriptions, and entries posted and approved by the same user.
The hard part is volume. Testing a handful by hand leaves most entries unseen.
An example
A manual entry credits revenue late on the last day of the quarter. It was posted by a user who rarely posts journals. It is reversed early the next month. Each fact alone is minor. Together they make the entry worth a close look.
How IRAME handles it
IRA, IRAME's AI auditor, tests every journal in the period against the criteria your team sets. The test is saved and re-runs each quarter with the same result, for internal audit, SOX testing and the close review.