Channel Stuffing
Identify channel stuffing — late period revenue reversed in the first weeks of the new period.
- General ledger alone
How the result is read
Stuffing is three patterns together: a late spike, post-period credit memos, and returns from the same customers. The linkage is the finding, not the spike — a business that closes deals at quarter end shows the same shape with none of the substance. The misstatement is the sum of the linked reversals invoice by invoice, never a residual.
The worksheet, on the demo engagement
Channel Stuffing, as the application draws it for Harrow Precision Engineering Ltd, the fictional demo engagement — one row per late invoice linked to its reversal.
- Dec 22-31 revenue
- 4,540 — 30.7% of Dec
- First 30 days reversals
- (4,800)
- Stuffing ratio
- 1.06
- Linked reversals — quantified
- (4,800)
Channel stuffing (ISA 315 fraud risk). A late-period spike that mirrors a post-period reversal is the inflated-revenue signature, and what is quantified is the linked reversals themselves — each traced to the invoice it reverses — rather than a residual left after estimating how much of the spike was genuine. The daily series sums to the 4,540 stated for the window.
Result grid5 rows
| Pattern leg | Period | Amount | Detail | Flag |
|---|---|---|---|---|
| Late-period revenue spike | Dec 22-31 (last 10 days) | +4,540 | 30.7% of December revenue (14,766) compressed into the last 10 days; manual JEs to Apex Retail, Northwind and Zephyr Ltd | severe period-end concentration |
| Post-close credit memos | Jan 1-30 | (4,800) | CM-3120 (1,840) + CM-3122 (960) + CM-3125 (2,000), each traced to the invoice it reverses | mirror reversal in first 30 days |
| Returns / refunds (post-close) | Jan 1-30 | (440) | Goods returned by Apex Retail (SR-9011) and Northwind (SR-9014) | matches premature-cut-off invoices |
| Quantified overstatement | FY25 | (4,800) | The sum of the linked reversals, invoice by invoice. Not a residual — subtracting an estimate of genuine late sales from the spike would make the answer equal to that estimate | channel-stuffing signature |
| Cross-reference | FY25 | CM-3120 and CM-3122 (2,800) are the same invoices as M-02 Premature revenue — counted once. CM-3125 (2,000) is additional and is raised separately | No double-count |
In the application
Channel Stuffing is filed under Revenue & receivables, index letter C. "Run all analyses" runs it with every other analysis the ledger can answer. The worksheet states the population it tested on its face — or "Not applicable" with the reason when a column it depends on is empty — and the Excel workbook the engagement exports files it under C, beside an index of the source files with their SHA-256 fingerprints.
Read it with
Run your next audit file test without the Excel crash.
One free engagement to evaluate, valid 60 days. The ledger never leaves the machine.
- 20 minutes
- Runs on a fictional engagement
- No client data required