A finished ACC-680 Topic 3 journal entry testing workpaper example, validating a full year's entry population against the trial balance, applying risk-based criteria set in advance and resolving every entry selected. Searches like "acc 680 topic 3 assignment example", "acc680 topic 3 sample" and "acc-680 topic 3 example" land here.
What a finished ACC-680 Topic 3 journal entry testing workpaper looks like
The finished workpaper begins with the data, not the criteria, all figures illustrative. The extract of 412,600 entries is rolled forward account by account, opening trial balance plus the year's entries against the closing balance, and the first roll-forward fails: 1,140 consolidation-ledger entries were missing from the file. After re-extraction every account ties. Six criteria follow, each linked to a fraud risk named in planning: entries to revenue or reserves after the close, entries by users outside finance, round amounts over $50,000, manual entries to seldom-used accounts, entries with blank descriptions and weekend postings by senior staff. The run returns 214 entries meeting at least one criterion and 37 meeting two or more. All 37 are examined, plus a selection of the rest. One, a $180,000 reserve release posted by the controller after close with no support, is escalated.
How an ACC-680 Topic 3 example is structured
The workpaper is arranged so that no result can be read until the population behind it has been shown whole. It opens with the purpose, a response to the risk of management override, which auditing standards direct auditors to address through journal entry testing whatever their assessment of controls. Data extraction comes second: the source system, the extract date, who ran it and the fields obtained. The completeness and accuracy test follows, the account-by-account roll-forward, with the failed first attempt and its cause recorded. The criteria section lists each test with the planning risk that justifies it and the threshold set before the run. Results appear next as counts by criterion and by combination. The follow-up section documents support for each examined entry. The workpaper closes with the escalated reserve release, its communication to the engagement partner and the conclusion on override.
The population proved complete first
An account-by-account roll-forward from opening to closing trial balance confirms the extract holds every entry before any criterion touches it.
A failed roll-forward kept on file
The first attempt missed 1,140 consolidation entries, and recording that failure and the re-extraction shows the completeness test actually had the power to fail.
Criteria traced to planning risks
Each of the six criteria cites the fraud risk from planning that justifies it, so no test exists merely because the software offered it.
Combinations ranked above single hits
Thirty-seven entries meeting two or more criteria are all examined, since overlapping characteristics concentrate risk far more than any single attribute does.
An unsupported release escalated
The $180,000 reserve release posted by the controller after close, with no support, goes to the engagement partner rather than into a routine exception list.
Where marks go in ACC-680 Topic 3
Journal entry work most often loses credit before any entry is examined, because nobody showed the population was complete. A workpaper reporting 214 selected entries from an extract nobody reconciled to the trial balance may be testing part of the ledger, and here the missing consolidation entries are where post-close adjustments tend to live. Criteria lifted from a software menu, with no link to the fraud risks identified in planning, produce selections no reviewer can evaluate. Treating every selected entry as an exception misreads what a criterion is: meeting one is a reason to look, not a misstatement. Papers that examine single-criterion hits and ignore combinations miss the ranking that makes the volume workable. The reserve release is the case markers check, and a paper filing it with routine exceptions has not treated override as the risk under test.
Get an ACC-680 Topic 3 example written to your instructions
Send the ACC-680 Topic 3 instructions, your classroom rubric and the entry data or case your section assigned. We write a custom example to them, with the population reconciled to the trial balance, criteria tied to planning risks and fixed in advance, results counted by combination and every selected entry resolved or escalated, back in 24 to 48 hours. The first one is free.
ACC-680 Topic 3 questions, answered
Why must journal entries be tested at all?
Because management is positioned to override controls, and recording fictitious or inappropriate entries is one of the most direct ways to do it. The PCAOB's standards and those of the AICPA Auditing Standards Board both require procedures over journal entries and other adjustments in response to that risk, regardless of how well controls appear to work. Full-population analytics make it practical to apply criteria to every entry rather than to a sample.
What does the roll-forward prove?
That the extracted entries, added to the opening trial balance, produce the closing trial balance for every account. If they do, the file contains the complete set of postings for the year, and any criterion applied to it covers the whole ledger. If they do not, some entries are missing or duplicated, and results from the file describe only part of the population. The test is cheap and it comes first.
How are criteria chosen?
From the risks identified in planning, not from what the software can do. Pressure to meet earnings targets suggests post-close entries to revenue and reserves; weak access controls suggest entries by users outside finance; complex estimates suggest entries to reserve accounts. Each criterion should name the risk behind it and fix its threshold before the run, so the selection can be defended as a response rather than a search.