Digital forensic investigation | Forensic data analytics
Cash book reconciliation
Salient helped a forensic accounting client to make sense of some mismatching client financial records.
This process spanned across four financial years, which saved us about three months of manual effort. Identifying the reconciling items and compiling the bank reconciliation over the four-year period (after the fourth round of results) took less than a week. This enabled us to post corrections on the accounting system and prepare information for the annual review quicker.
The Challenge
The client company was required to produce audited financial statements, however they had discovered that errors in data entry and failure to reconcile entries in the cash book with bank statements, had led to a situation that was difficult to unravel.
Salient were engaged to use forensic data analytics skills to identify and reconcile line items from cash book and bank statements, reducing the manual effort involved in matching these records.
Challenges
Identify and reconcile 30,000 cash book and bank statement line items across four financial years
Perform auto-matching to significantly reduce volume of transactions requiring manual reconciliation
Results
“Salient e-Discovery assisted in running scripts on approximately 30 000 cash book and bank statement line items to auto-match transactions based on similar receipt and payment references during the first round. They performed four rounds of auto-matching in total, which significantly reduced the number of transactions to be manually reconciled. The results from each round were made available online and we were able to download the results into Excel. After each round, we discussed the applicability of certain queries and further refinement thereof to ensure robust and accurate matches.”
– Cornelia Niemand, Independent Consultant
The Salient Solution
The scale of the problem soon became apparent; 30,000 cash book and bank statement line items had to be checked and matched against similar receipt and payment references during the first round.
Although this was not a fraud investigation, we were able to bring our forensic data analysis experience to bear and apply a number of techniques to help to expedite the reconciliation.
Efficient data consolidation and auto-matching
Our data experts applied a series of different searches to the data to identify potential duplicates and matches, and to examine consolidated entries entered on the same date or under a similar name. Some of the entries on the spreadsheet could be automatically matched clearly to the relevant entry on the bank system, where anomalies were flagged, these were reviewed by an accountant and manually reconciled. Four rounds of auto-matching were completed, significantly reducing the number of transactions to be manually reconciled.
Regular client feedback and review to refine results
The results from each round were made available online and the client was able to download the results into Excel. After each round, we discussed the applicability of the queries and refined them to ensure robust and accurate matches.