Relative Size Factor: Finding Outliers

In my previous article Auditing: Accounts Payable / Vendor Payments I spoke about Relative Size Factor (RSF) and how it can used to identify isolated outliers in vendor invoices. In this article I’ll try to show how RSF can be calculated in Excel.

The RSF test is an important tool for detecting errors. RSF test compares the top two amounts for each subset and calculates the RSF for each. The test identifies subsets where the largest amount is out of line with other amounts for that subset.

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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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