Once the trial balance items are loaded they populate the draft column on the trial balance page in the A section. Any misstatements /audit adjustments found during the work are entered as journal entries from the drop-down box at the bottom right of every work item or displayed account line by selecting the journal entry tab:
- The "please select" drop-down shows all accounts in the trial balance
- Unlimited lines may be added to the journal entry
- Use the search to find the right account
- Add narration – to describe the nature of the misstatement
- Select accounts to be adjusted and amount – use negatives for credits - cents may be included if required:
If an account is not yet in the trial balance select "add account" from drop down in the section where the new account is required:
- Check-total indicates if the journal is in balance – it is not required that journals must balance to allow for instances where one-sided journals may be appropriate
- Once journals have been created against a TB item, that item will show as red wherever it is displayed
- Clicking on the red item will open the adjustments page and highlight the journals:
All journals are accumulated on the adjustments page W1 (this page may also be accessed from the adjustments tab in the top bar) – the adjustments display on the adjustments page as follows:
- Journals may be edited from this view or from the original page
- New adjustments default to pending status
- NOTE: A follow-up may be added indicating the status of the misstatement prior to an agreement being reached over adjustment – journals with follow-ups added may be printed as a client report (see below)
- Once adjusted by the client in financial statements they may then be marked as posted by selecting "Post Journal"
- This changes the status to "Posted" with th ename of the person who carried this out:
- If a journal is not to be adjusted in the financial statements a comment must be added as to why not – it will then be classed as an unadjusted misstatement
A summary at the top of the adjustment page represents the combined effect of pending, adjusted and unadjusted entries on income, expenses, assets, liabilities and profit:
- Once posted the journal updates the trial balance final column – indicated by changing from red to green:
- Posted adjustments also carry through to lead schedules
- Final analytical review amounts include posted adjustments - but the analytical review in the planning area continues to use the draft figures imported from client trial balance
The adjustments page also contains an option to print reports for giving to the client:
- Only commented items (explaining why not posted) show in unadjusted part of report (not pending items):
- These reports are normally used to accompany the management report and/or representation letter
- The header is normally hidden and the report is printed onto firm letterhead:
- For instances of non-monetary adjustments use the disclosure option.