What it is
Management override of controls is a risk in every audit and every ICFR evaluation, and journal entries are one of the ways it happens. Testing entries by risk criteria, instead of only at random, finds the ones more likely to be improper.
This worksheet applies eight criteria to a listing of up to 200 entries: weekend posting, backdating, round amounts, amounts above a threshold, manual entries with no approver, entries approved by the preparer, no description and post-closing entries. It counts the flags and selects entries that meet your trigger.
When to use it
- When internal audit or the external auditor tests journal entries.
- As a quarterly management review of unusual entries.
- After a fraud allegation involving the close.
What’s inside
- Criteria tab for thresholds, backdating days, post-closing window and selection trigger
- Entries tab for 200 entries with eight calculated flags and a selected flag
- Summary of entries and amounts per criterion and selected count
Standard cited
This template follows AU-C 240 / SOX 404. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use. See AU-C 240 explained.
Questions
Does a flag mean the entry is wrong?
No. A flag means the entry deserves a closer look. Selected entries need support and an explanation, and the result goes in the follow-up column.
Where should the listing come from?
From the ledger itself, not a copy prepared by the preparers. Check completeness before relying on it, for example by agreeing totals to the trial balance, and record how you did it.
Related templates
- Control Test Script: Manual Journal Entry Approval
- Risk and Control Matrix: Financial Close
- Fraud Risk Assessment Worksheet
- Fraud Inquiry and Brainstorming Documentation (AU-C 240)
Last updated 11/05/2026. All free templates.