Internal Audit Department
Practical Example – Accounts
The objective of the review was to undertake an independent systematic assessment of
the accounts payable data.
The audit scope focused on reviewing several months worth of accounts payable data in
• identify potential duplicate payments
• highlight unusual supplieractivity
• highlight unusual payment activity
• identify potential ghost suppliers
Whilst Benfords Law is a very useful tool the results have to be interpreted alongside the
conclusions of a whole suite of tests.
As part of the APaudit IDEA was used to performthe following tests:
- debit balances
- historic invoices
Query run to establish invoices which were debit balances to ensure
appropriately classed as a credit note.
Query run to establish extent of old invoices.
Potential Duplicate Payments Several queries run to identify potential duplicate payments:
Supplier No Invoice No Invoice
1 Match Match Match Match
2 Match Match Match
3 Match Match Match
4 Match Match Match
5 Match Match Match
The Caveat cont ….
Duplicate Bank Account
Query run to identify where different suppliers have the same bank
Ghost Suppliers Search Matching performed between Supplier Database and Employee
database to establish whether there were any links between :
● bank details
Date Analysis Identification of transactions posted at weekends.
Benfords Law Analysis Query run to identify any potential anomalies in the data for further
Benford’s Law – IDEA Steps
1. Obtain data file which includes all the details of paid invoices within the defined time
2. In this case had to remove negative amount (using the Extraction query) which had
been classed as credit notes
3. Summarized the data by SupplierNo and Invoice No (as each invoice numberwas
repeated foreach line itemon that invoice)
4. Chose Benford’s Law fromthe Analysis menu
5. Result is given in a table format which you can then convert into a graphical format