The Center for Audit Quality is encouraging audit firms to follow a common format for testing journal entries and other journal adjustments to make it easier for auditors to spot potential fraud.
The CAQ developed a practice aid with the help of auditors from its various member firms for testing journal entries based on the requirements of AU Section 316, “Consideration of Fraud in a Financial Statement Audit.” That’s the standard audit firms are required to follow when auditing financial statements for public companies.
