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A listed company integrates Internal Control over Financial Reporting (ICOFR) with its ERP. Which of the following ERP-supported steps is LEAST appropriate to identify intentional backdating of accounting entries?
ARelying on monthly P&L variance analysis alone to detect backdated entries
BComparing the system 'posting date' with the underlying 'transaction date' to surface inconsistencies
CReviewing the audit trail of period-end manual journal vouchers and approvers
DReviewing accounting-period configuration controls in the ERP to validate that postings occur in the correct period
Answer & Solution
Correct answer: A. Relying on monthly P&L variance analysis alone to detect backdated entries
Period configuration controls, posting-date vs transaction-date checks and JV audit trails directly surface backdating; P&L variance analysis is a high-level analytical review and is too coarse to detect entries deliberately posted to a prior period (the chapter's listing on ICOFR-ERP integration).
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