Financial Management
Month-End Cut-Off Testing
Transactions straddling the reporting date tested for correct period allocation.
Why cut-off keeps periods comparable
Recording a transaction in the wrong period misstates both the closing and opening results and is one of the simplest ways for performance to be misrepresented, which is why cut-off is a standard substantive procedure. The GRAP accrual basis requires revenue and expenses in the period to which they relate, regardless of cash movement. AuditPro Core isolates transactions straddling the reporting date and tests them against the correct period allocation.
The Numbers
AuditPro Core renders this view from your tenant's live, tamper-evident records. The figures below are illustrative sample data.
Cut-off items tested
640
Misallocated
37
Net misstatement
R8.4 m
Accruals reversed
R3.1 m
Cut-off exceptions by category
Material cut-off exceptions
| Reference | Issue | Amount (R) |
|---|---|---|
| GRN-7741 | Received after year-end | 1840000 |
| INV-5520 | Service date next period | 920000 |
| JV-3318 | Revenue early-recognised | 1410000 |
Figures shown are illustrative sample data for demonstration. AuditPro Core renders these views from your own tenant's live, tamper-evident records.
The cut-off assertion
Cut-off tests whether transactions are recorded in the correct accounting period. Errors here move revenue or expenditure across the year-end boundary, distorting both years.
Accrual basis discipline
Under GRAP, the obligating event and the delivery of goods or services, not the payment date, determine the period. Goods received before year-end but invoiced after still belong to the closing period.
Window around the date
Testing focuses on the days immediately before and after the reporting date, where the risk of misallocation, deliberate or accidental, is concentrated.
Both directions matter
Cut-off errors run both ways: pulling income forward or pushing expenses back. Testing must look for understatement as well as overstatement of the closing period.
How AuditPro Core Bridges the Gap
- Boundary isolation: transactions dated within the cut-off window are extracted for focused testing against delivery evidence.
- Period reallocation flags: items recorded in the wrong period relative to their obligating event are surfaced for adjustment.
- Exception workflow: misallocated transactions route for correction with the supporting delivery or receipt evidence attached.
- Audit-ready trail: the cut-off working paper exports with each tested item traceable to its source document.
Key Takeaways
- Allocate to the period of the obligating event, not the cash date.
- Concentrate testing on the days either side of the reporting date.
- Look for errors in both directions, income pulled forward and costs pushed back.
- Support each period allocation with delivery or receipt evidence.
See This on Your Own Data
AuditPro Core renders this dashboard from your tenant's live, tamper-evident records — every figure traceable to source.