The Center for Audit Quality issued a practice aid on testing journal entries. The nonauthoritative document is designed to be a reference for auditors of public companies when applying certain sections of AU section 316, Consideration of Fraud in a Financial Statement Audit, of the PCAOB’s interim auditing standards. It specifically addresses gaining an understanding of internal controls over journal entries; selecting journal entries for testing, including the use of computer-assisted audit techniques; evaluating journal entries; and documenting the results of testing.
The guidance is based on existing professional literature, information gathered by members of a CAQ task force and the experiences of CAQ member firms. The practice aid is available here.