Sequence Analysis
Definition
Verification that a numbered series progresses in expected order without skips, reversals, or unexpected repetitions. It is the positive counterpart to gap testing.
- Checks for
- Skips, reversals, unexpected repetitions in a numbered series
- Relation to gap testing
- Positive counterpart
- Field
- Computer-assisted audit techniques (CAATs)
- Typical target
- Invoice numbers, cheque numbers, transaction IDs
- Output
- List of anomalies for follow-up investigation
Common questions
How does sequence analysis differ from gap testing in an audit?+
Gap testing specifically looks for missing numbers in a series, which could indicate deleted or concealed records, while sequence analysis more broadly confirms the series progresses in the expected logical order, also catching out-of-order entries and unexpected duplicates.
What kind of fraud does a sequence anomaly typically point to?+
An out-of-sequence or duplicated document number can indicate manual override of an automated numbering system, backdated entries, or fabricated records inserted outside the normal transaction flow, all of which warrant further forensic accounting scrutiny.
Is sequence analysis performed manually or with software?+
In modern forensic accounting it is almost always run through computer-assisted audit tools like ACL or IDEA on the full electronic dataset, since manually checking sequence integrity across thousands of records is impractical and error-prone.
Related terms
- CAATs
- Computer-Assisted Audit Techniques: software-driven procedures applied to electronic data files that test the full population of transactions rather than a sample, covering...
- Duplicate Detection
- A systematic search for records that share key fields (invoice number, vendor, amount, date) that should be unique, surfacing duplicate payments, double...
- Gap Test
- A test that identifies missing numbers in a document sequence (check numbers, invoice series, purchase orders) where continuity is expected; gaps often...
- Join-and-Match
- A cross-table technique that links two or more data files on a common key, such as matching vendor bank account numbers against...
- Ratio Analysis
- Calculation of financial ratios across periods or business units to identify statistically unusual deviations that might indicate manipulation: cost ratios, gross margin...
- Stratification
- The grouping of numeric values into defined ranges (strata) to reveal the distribution of a dataset. In fraud detection, large concentrations of...