FAQ
How does a ledger audit differ from a financial statement audit?
A financial statement audit is designed to provide reasonable assurance to intended internal and external users that the financial statement is presented fairly. Financial statement auditors make their judgement, in part, by examining a small subset of ledger transactions. A ledger audit, on the other hand, is designed to uncover bookkeeping errors and signs of fraud. Internal users leverage the information provided by the audit to improve accounting controls and thwart theft.
The examined timeframe can also differ significantly. Financial statement audits typically examine one fiscal year. TraceTech Solutions’ ledger audits typically include several years of data, since the impact of errors and fraud may accumulate over several years.
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Is TraceTech Solutions’ ledger audit limited to specific accounting software applications?
TraceTech Solutions works with almost any accounting application. Our proprietary technology uses ledger “snapshots” that our clients export to an Excel-readable format. Nearly every accounting application including all versions of QuickBooks, PeachTree and most niche-specific applications, can do this.
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What external data sources are used to verify ledger data?
TraceTech Solutions’ ledger audits can optionally verify ledger records with bank account statements, credit card statements, payroll reports, employee lists, vendor lists and often custom internal reports. Clients provide TraceTech Solutions with this data in either softcopy or hardcopy form.
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How will the audit impact the current accounting software system?
Not at all. The audit will use a “snapshot” of the ledger database.
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What’s the procedure?
The client delivers the financial information (softcopy and hardcopy as appropriate and agreed-upon) to TraceTech Solutions. About two-to-four business weeks later TraceTech Solutions will deliver detailed error/suspicious/questionable transaction reports to the client, along with a summary report that includes suggestions for improving bookkeeping procedures and, if necessary, suggestions for further investigation. TraceTech Solutions and the client review those reports together.
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How does TraceTech Solutions secure the clients’ data in its possession?
TraceTech Solutions enters all client data into its computing servers and returns all original data to its clients. TraceTech uses 256-bit encryption to protect all data it retains on its primary and backup servers. Servers are maintained in locked facilities. Original data, while it is in TraceTech’s possession, are maintained in a locked facility.
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Will the audit staff know of the audit?
That depends on the client’s personnel, knowledge and organization.
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How often should ledgers be audited?
That depends on the client’s need. TraceTech recommends annual audits for clients that seek regular assurances of good bookkeeping practices. TraceTech Solutions recommends only one audit for clients who are suspicious that they have been victimized by a dishonest employee.
