AUD Fraud Procedures · Updated November 2026

Why Does the Auditor Test Journal Entries Even When Controls Look Strong?

Strong controls do not eliminate the risk that management can bypass them with unusual or manual entries.

Management override

Management can sometimes bypass ordinary controls, making override a recurring fraud-risk concern.

Journal entry testing

The auditor can focus on risky characteristics such as period-end timing, unusual users, round-dollar amounts, unexpected accounts, manual entries, and weak business rationale.

Estimates

Override procedures also interact with evaluation of accounting estimates and possible management bias.

Unusual transactions

Significant transactions outside the normal course of business deserve special attention.

The takeaway

Management override is why the auditor still analyzes journal entries, estimates, and unusual transactions even in a well-controlled company.

Related Summit guides

Fraud triangleContinue with a related Summit CPA Review guide.Audit data analyticsContinue with a related Summit CPA Review guide.Related partiesContinue with a related Summit CPA Review guide.

FAQ

Does the auditor test every journal entry manually?

Not necessarily.

Is management override a fraud-risk concern?

Yes.

Can analytics help identify risky entries?

Yes.