Walk-Through Test
What Is a Walk-Through Test?
A walk-through test is a methodology utilized during a audit of a substance's accounting system to check its dependability. A walk-through test follows a transaction step-by-step through the accounting system from its beginning to the last disposition. In any case, walk-throughs aren't required for accountants however can be instrumental in tending to weaknesses and issues.
Figuring out Walk-Through Tests
A walk-through test is only one of many tests performed by auditors during their evaluation of an organization's accounting controls and risk management measures. The test can uncover system lacks and material weaknesses that would should be amended by the organization at the earliest opportunity.
In directing a walk-through test, an auditor will study how a transaction is initiated and travels through a company or organization's accounting system to completion. This includes recognizing how a transaction is authorized, recorded — physically, via automated means, or both — and afterward reported in the general ledger of the books. The auditor will need to realize how controls for exactness are applied at each step all the while and how follow-up steps are taken to further develop controls.
A decent walk-through test will likewise document the work force engaged with transaction sections in the accounting system. Agendas and flowcharts are useful in directing careful walk-through tests. The American Institute of Certified Public Accountants (AICPA) suggests walk-through tests on an annual basis.
Walk-through tests don't need to be a conventional cycle, as numerous small organizations will perform a walk-through test without keeping itemized records or evaluating a company's accounting records. That is, the auditor will notice and make requests without mentioning definite documentation or surveying the paperwork or paper trail of the transaction.
Special Considerations
A walk-through test should be possible by basically asking employee inquiries, albeit this isn't suggested. This is on the grounds that an employee's description isn't dependably what occurs in practice. The better method of a walk-through is really noticing employees — how they process transactions, and so on. Too, really dissecting paperwork and documents is a step further in breaking down the company's accounting cycle.
Illustration of a Walk-Through Test
A walk-through will look contrastingly contingent upon the company and auditor, yet comprehensively, the interaction ought to incorporate a visual assessment of how the staff works while recording a transaction. Next, the auditor will talk with anybody who handles the transaction and afterward survey the documents connected with the transaction. An auditor may likewise test the accounting controls assuming any are in place.
Toward the finish of the walk-through, the auditor will frame the weaknesses in how the transaction was taken care of. The thought is that these weak points can then be rectified to further develop a company's accounting system.
Features
- The American Institute of Certified Public Accountants (AICPA) suggests walk-through tests on an annual basis.
- Walk-through tests are audits of accounting systems that check dependability.
- Auditors doing the walk-through will watch the company's staff and investigated documents made during the interaction to distinguish weak points.
- These tests hope to uncover lacks and material weaknesses in a company's accounting systems.
