Spreadsheets: Auditing & Validating (Part 2)

00_Spreadsheet AuditIn the previous post I mentioned few of the risks associated with spreadsheets. In this post I’ll try to show some excel tools which can help  in detecting errors and frauds in Excel spreadsheets.

In the late 1990’s “Poor control over spreadsheets at Jamaican indigenous banks contributed to management information and external reporting problems (i.e., P&L distortions) that contributed to the banks’ management and external regulators losing sight of the banks’ true positions and exposures. Which led to collapse of entire Jamaican Banking System.

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Spreadsheets: Risks (Part 1)

Spreadsheets have stood the test of time because they continue to meet the analytical needs of organizations, especially for analyzing and reporting financial results and providing support for decision-making.

“…spreadsheets will always fill the void between what a business needs today and the formal installed systems…” Mel Glass et al

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Auditing: Accounts Payable / Vendor Payments

Accounts payable AuditAccounts Payable is one of the crucial area in audit. As it represents the monies owed by the organization to its creditors for supply of goods and services. Also for a fraudster who is looking to steal from the business, accounts payable is an easy target, if proper controls are not there.

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Beneish M-Score: Identifying Financial Statement Manipulations

Analyzing Financial DataAccording to the ACFE’s “Report to the Nation 2016” financial statement fraud occurred in less than 10% of the cases reported by the respondents. But it caused the highest median loss of $975,000. Asset misappropriation schemes was reported in more than 83% of the cases with median loss of $125,000. And Corruption cases fell in the middle with 35.4% of cases with median loss of $200,000. Several cases included schemes in more than one category.

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A Brief History of Auditing

The term “Audit” is derived from the Latin term “Audire” which means “to hear”, because in ancient times auditors listened to the oral reports of responsible officials to owners or those having authority, and confirmed the accuracy of the reports. Over the years the role evolved to verify written records also.

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Financial Shenanigans: Cash Flow & Key Metrics Shenanigans (Part 3)

In the previous post I mentioned the brief summary of Earnings Manipulation shenanigans.
Below is the summary of some methods used to manipulate cash flow & key metrics in financial statements as identified by Howard Schilit in his book Financial Shenanigans.

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Financial Shenanigans: Earnings Manipulation (Part 2)

In my previous post I mentioned the brief summary of accounting shenanigans identified by Howard Schilit in his book Financial Shenanigans used by management to manipulate earnings, cash flow and key metrics.
Below is the summary of various methods management uses to manipulate the earnings through the 7 Earnings manipulation shenanigans.

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