Reasonableness Tests
Substantive analytics with an expectation: payroll taxes to wages, output tax to taxed sales, and the monthly run-rate of depreciation and interest, each against the entity's own typical month.
- General ledger alone
How the result is read
A substantive analytic needs an expectation precise enough to detect a misstatement at tolerable error. Payroll taxes move with wages and output tax with sales, so the entity's own median monthly ratio applied to the year's base predicts the year; depreciation and interest accrue evenly, so the median month predicts the rest. A month out of line is where a missing accrual, a double posting or a misclassification sits.
The worksheet, on the demo engagement
Reasonableness Tests, as the application draws it for Harrow Precision Engineering Ltd, the fictional demo engagement — one row per test.
Illustration. Depreciation stopped being posted in September; payroll taxes spike with December bonuses.
Result grid2 rows
| Test | Expectation basis | Expected | Recorded | Difference | Threshold |
|---|---|---|---|---|---|
| Payroll taxes to wages | median monthly ratio 7.65% of the base | 236,180.00 | 251,900.00 | 15,720.00 | 25,000.00 |
| Depreciation run-rate | median month x 12 | 144,000.00 | 96,000.00 | -48,000.00 | 25,000.00 |
In the application
Reasonableness Tests is filed under Planning & analytics, index letter A. "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 A, 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