Industry
Pharmaceuticals
Annual Revenue
$1.5+ Billion
Location
Virginia, USA
How we enhanced compliance was by enabling risk-based, automated journal entry testing.
Enabled automated journal entry analytics and visualization, enhancing audit accuracy and efficiency by identifying high-risk patterns, supporting ICFR (Internal Control over Financial Reporting) testing.
Challenge
The client faced multiple challenges in performing journal entry testing for ICFR audits, including:
- Manual Review Limitations: High volumes of journal entries made manual testing inefficient and error prone.
- Hidden Risk Patterns: Difficulty in identifying reversing/reclass entries, large adjustments, or unusual posting behaviors.
- Delayed Testing: Late-posted or parked entries created timing issues for testing accuracy.
- Compliance Risks: Lack of systematic detection for period-end and post-closing anomalies increased audit risk exposure.
Solution
Our team collaborated with client stakeholders to design and implement an automated analytics and visualization framework
Population Stratification
Applied high-level statistics to identify spread of entries across companies, accounts, periods, and users.
Automated Entry Detection
Flagged entries that could be manually manipulated or repeated.
Risk Indicators
Built keyword search for reversing/reclass entries and identified large trend anomalies.
Late & Duplicate Entries
Highlighted entries posted significantly after preparation date or parked/postings by the same user.
Period-End Analytics
Identified unusual weekend/holiday postings to flag higher risk items.
Visualization
Delivered a Power BI dashboard and Excel summaries for dynamic drill-down and risk-based sampling.
Reference Architecture
Result
- Improved Audit Accuracy: Identified risk-based samples and anomalies that would otherwise go undetected.
- Enhanced Transparency: Provided auditors with visual dashboards and clear evidence trails for testing.
- Regulatory Compliance: Strengthened ICFR audit readiness and reduced material misstatement risk.