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Solving the Mystery of the Untraceable Changes in G/L Accounts

Jun Wang Profile Picture Jun Wang 3,553 Super User
Solving the Mystery of the Untraceable Changes in G/L Accounts

Have you ever faced a situation where your General Ledger (G/L) account balances change without any apparent trace of transactions? This can be puzzling, even alarming, as it seems to defy the fundamental principle of accounting that every transaction must be recorded. Let's walk through a real-life scenario and explore how to trace the source of these mysterious changes.
Imagine it's the start of the new year, and you're reviewing your company's G/L accounts. Your stock account, labeled 1411, showed a balance of $10,000,000 on December 31, 2023. You completed the year-end closing process, confirmed all bookings were made, and even verified the balance a week later — it was still $10,000,000. Then, out of the blue, the balance reads $10,043,000. No additional bookings are visible, and no one recalls making manual adjustments. It's as if $43,000 appeared out of thin air!
Before concluding it's an act of a ghost in the accounting machine, consider a plausible explanation: the closed period could have been reopened and transactions may have been posted without your knowledge. This can happen in systems where period locks are not strictly enforced or where users with elevated permissions have the capability to make retrospective postings.
 The Solution
 To unearth these ghostly transactions, you need to don your detective hat and do some sleuthing in the General Ledger entries. Here's a step-by-step guide:
1. Access General Ledger Entries: Navigate to the ledger entries in your accounting software. This is the ledger where all financial transactions are recorded.
2. Apply Filters: Use the G/L account number 1411 as a filter to narrow down your search to the specific account in question.
3. Inspect Entries: Carefully examine the entry numbers or the posting dates. Look for transactions that do not align with the dates before the closing period or any entries that are unfamiliar or unexpected.
By following these steps, you can identify any additional transactions that may have been posted to account 1411. It’s essential to examine the permissions and audit trails, as they can reveal who made the postings and when.
An untraceable change in G/L accounts is a serious matter that warrants immediate attention. It challenges the integrity of your financial records and can have implications for your financial reporting. By conducting a thorough investigation, you can not only rectify the current discrepancy but also implement stricter controls to prevent such occurrences in the future.
 Remember, in the realm of finance, there are no ghosts, only traces waiting to be found. With due diligence and the right approach, the veil over these mysterious transactions can be lifted, restoring clarity and confidence in your accounting practices.