Testing a numerical sequence
Prenumbered documents such as checks, sales invoices, receiving reports and purchase orders give the auditor a way to test completeness without relying on the client's own list of what was recorded. If the numbers run continuously and each is accounted for, either as a recorded transaction or as a voided or unused form, the population is more likely to be complete. This test sits alongside cutoff testing and the search for unrecorded liabilities.
What the tool does
- Splits each entry into a prefix and the trailing digits, and checks each prefix as its own sequence.
- Finds the range from the lowest to the highest number, or from the expected first and last numbers you enter, and lists every missing run as a range, not as a million single lines.
- Takes out the voided and spoiled numbers you provide, leaving the unexplained gaps.
- Lists numbers that appear more than once and counts the times a number is lower than the one listed before it.
Working a gap
Trace each unexplained number to the void log or the voided document, to the next or prior period, and to other bank accounts or ledgers that share the sequence. For checks, look at the bank statement and the cleared items for the number. If nothing explains it, ask management and consider whether it bears on the risk of misstatement in cash disbursements. AU-C 330 requires substantive procedures that respond to the assessed risks, and the gap test is one input to those.
Limits
The test works on what you paste. Sequences restart, change prefix or run across several systems, and a numbering gap is often benign. Where a client uses a system that assigns numbers without gaps, a gap can mean a deletion, which is worth knowing. Where the client can edit or reuse numbers, a clean sequence says little. No sampling is involved: the test runs on the whole list.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
How do I find missing check numbers?
Paste the check numbers from the register, set the expected first and last number if you know them, and read the gap list. Take out the voided and spoiled checks using the void log. What remains is a list of numbers to trace: each is either an unrecorded check, a check recorded in another period or account, or a form that was never used.
Why test the sequence of prenumbered documents?
A continuous sequence supports the completeness of recorded transactions, and a gap points to a transaction that may not have been recorded or a document that was removed. The same test on duplicates shows documents used twice. It is a lead for further procedures, not a conclusion.
Does a clean result mean the population is complete?
No. It shows that the numbers you pasted run continuously. A missing first or last document, or a run of numbers held back, will not appear unless you enter the expected range from an independent source such as the check stock log or the prior period closing number.
What does out of order mean on a check register?
It counts the times a number is lower than the one listed just before it. If the register is in date order, that can mean a check was dated or recorded out of sequence, which is worth asking about. If the list is sorted by something else, such as vendor, the count has no meaning and can be ignored.
How are prefixes such as CHK- or INV2026- handled?
Each distinct prefix is checked as its own sequence, and the number is the trailing digits. Tick the option to ignore prefixes if the prefix changed during the year but the numbers kept running. Leading zeros are ignored, so 0042 and 42 are the same number.
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.