Introduction
One of the most complex aspects auditors go through every year is the review of all General Ledger impacting transactions for fraud and error. This is part of the Statement of Auditing Standard 99 (SAS99) and is a required step for all financial audits – both for public and private companies.
One of the audit procedure is to understand the source of the journal impacting transactions and whether it is considered as system generated or not. Typically manual journals are considered high risk and are specifically included in this review. System generated journals that have adequate internal controls are not generally included in this review.
Given the complexity involved in NetSuite, we thought we will build a guide that auditors and auditees can use to understand the nature of these transactions.
GL Impacting Transactions
We have given the list of most common transactions in NetSuite below. Please click on Next to review the complete list. Following are the explanation on each column
- Cycle – Order to Cash, Procure to pay, Inventory, etc.
- Impacts GL – Whether this transaction type impacts GL or not. For example, a Purchase Order is not a GL impacting transaction.
- How to identify In UI – If the specific transaction is being reviewed on the UI(User Interface – Browser), how to identify this transaction. For example, for a fixed asset journal, a custom sub-list contains the parent fixed assets details. In many other cases, the header of the journal itself provides this information. For example, in case of revenue recognition journal, the header will state ‘Created from Revenue Recognition Schedule’.
- Not Locked (Lock) – This is a critical aspect that an auditor needs to be aware. For example, for a fixed asset journal entry, although the journal is created through the fixed assets module, the amounts could be modified. Hence, unless a workflow based lock is enforced, there is a risk of subsequent change. Anything with Y requires additional workflow to lock them.
- Source – The specific process that creates this entry.
- Type – While creating a saved search to extract the data, what is the Type of the transaction that should be included to get this data? For example, a revenue reclassification entry will be of type journal and does not have its own type.
- How to identify In Search – In a saved search including this field will help in identifying the source of a transaction.
- Created by –As seen, sometimes the user name will be System while sometimes it will be the logged in user.
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