[xibadx]

If you were given a B/S account to analyze movement in, what steps would you take and what would you look for?

All passed on first try - Licensed CPA Texas
Studying tip: Study throughout the day (short intervals, no more than 3hrs/day total), take exam later in the day and cram before your exam.

[Mayo]

Depends on the account and the client. If movement is not large then I don't worry myself about it. If it's a substantial flux, then I'd

A.) Ask the client to provide an explanation; 5/10 times it's them guessing but a good client contact will know the inner workings of the company and account activity.

B.) Look at prior years and prior quarters. What were the explanations then?

C.) Dig into the Journal Entries. You can use filtering and pivot tables to get an idea of the descriptions of the entries, the time frame, the size, who is entering them, etc. Also, look at what accounts ar ebeing affected beyond the account you are looking at. A/P went down? Well what kind of accounts were affected by that movement? Do those accounts make sense to be debited or credited?

Mayo, BBA, Macc

[xibadx]

Thanks!

I was actually asking from an industry standpoint. If you're a staff or senior and your manager gives you a balance sheet account to analyze movement, what would be your next steps?

I was thinking – get a TB and figure out what corresponding IS or BS accounts are being affected and ensure proper posting of journals to all. For example, if assets are being released then cash inflow (or AR) should be coming in .

All passed on first try - Licensed CPA Texas
Studying tip: Study throughout the day (short intervals, no more than 3hrs/day total), take exam later in the day and cram before your exam.

[Author]

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