The formulas
- Rolled-forward = interim balance + additions - reductions
- Break = recorded year end - rolled-forward
- Gross activity = additions + reductions
How it works
AU-C 330 paragraph .23 requires that, when substantive procedures are performed at an interim date, the auditor covers the remaining period with further substantive procedures, alone or combined with tests of controls, that give a reasonable basis for extending the interim conclusions to period end.
The rollforward proves the arithmetic. The size of the remaining activity says how much work it needs: activity that is large against the year-end balance or performance materiality needs tests of details, not just an analytic. Paragraph .A66 lists predictability of the balance and cutoff procedures as factors in that choice.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
What if I found misstatements at interim?
If they were not expected, AU-C 330 .24 requires you to evaluate whether the risk assessment and the planned procedures for the remaining period need to change.
Can I use only analytics for the rollforward?
When the balance is predictable and the entity's period-end analysis and cutoff are reliable, per AU-C 330 .A66.
Should the activity tie to other accounts?
Yes. Additions to receivables tie to sales, reductions to cash receipts and credits.
Sources
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.