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What Does “Footed” Mean In Auditing? What Does “Footed” Mean In Auditing?


What Does “Footed” Mean In Auditing?

"Footed" in auditing refers to the process of reconciling the total of a column in a document to ensure accuracy in financial statements. Explore the meaning and significance of this term in finance.

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In the world of auditing, several terms and jargon are used to assess and evaluate financial statements. One such term is “footed.” If you’re new to auditing or finance, you might be wondering what exactly this term means and why it’s important.

When we talk about footed in auditing, we are referring to the process of verifying the accuracy of calculations and totals in financial statements. This is a crucial step in the auditing process as it ensures the reliability and integrity of the information presented in a company’s financial reports.

Understanding the concept of footed is essential for auditors, financial professionals, and anyone involved in analyzing financial statements. In this article, we will dive deeper into the definition of footed in auditing, its importance, the processes and techniques involved, common errors to watch out for, and how to verify footed accuracy.

So, whether you’re a budding auditor or simply someone interested in learning more about financial statement analysis, read on to gain a comprehensive understanding of what it means to be footed in auditing.


Definition of “Footed” in Auditing

In auditing, the term “footed” refers to the process of verifying the accuracy of calculations and totals in financial statements. It involves checking that all numbers add up correctly and that there are no discrepancies or errors in the calculations. This step is essential in ensuring the reliability and integrity of the financial information presented in the statements.

When financial statements are prepared, various calculations and totals are derived from the underlying data. For example, in an income statement, revenues, expenses, and net income are calculated by adding, subtracting, and totaling various line items. The same applies to balance sheets, where assets, liabilities, and shareholders’ equity are computed using a series of calculations and adjustments.

The footed step involves meticulously going through the financial statements and verifying that each calculation, subtotal, and total is accurate and reflects the underlying data and transactions appropriately. It ensures that there are no mathematical errors, double-counting, or omissions in the calculations.

It’s important to note that footed is not just about verifying the calculations themselves but also confirming that the numbers are correctly transferred from one section of the financial statements to another. This includes ensuring that numbers from subsidiary schedules or supporting documents are accurately incorporated into the main statements.

Additionally, footed also involves ensuring that the financial statements follow the generally accepted accounting principles (GAAP) or the applicable accounting standards. This means recognizing any specific rules, conventions, or requirements related to the presentation, classification, and disclosure of financial information.

Overall, the footed process in auditing is focused on reviewing and validating the accuracy and completeness of the calculations, subtotals, and totals in the financial statements. By meticulously checking each component, auditors can ensure that the financial information is reliable, consistent, and free from any significant errors or unintentional misstatements.


Importance of Footing in Auditing

The process of footing plays a vital role in the auditing of financial statements. It serves several important purposes that contribute to the overall integrity and reliability of the information presented. Here are some key reasons why footing is essential in auditing:

  1. Accuracy verification: The primary purpose of footing is to verify the accuracy of the calculations and totals in financial statements. By meticulously reviewing each figure, auditors can ensure that the numbers presented are correct and reflect the underlying data accurately. This helps to prevent errors, double-counting, or omissions that could misrepresent the financial position and performance of an entity.
  2. Identifying errors and irregularities: Footing allows auditors to identify any errors, irregularities, or inconsistencies in the financial statements. When numbers do not add up correctly or are misclassified, it raises red flags and prompts auditors to investigate further. By catching and rectifying these errors early on, the overall reliability and credibility of the financial statements are strengthened.
  3. Enhancing transparency: Accurate footing helps promote transparency in financial reporting. When calculations and totals are properly validated, stakeholders can have confidence in the financial information provided. This transparency is critical for investors, creditors, regulators, and other interested parties who rely on the financial statements to make informed decisions.
  4. Avoiding legal and regulatory issues: Incorrect calculations and totals in financial statements can lead to legal and regulatory issues. Inaccurate financial information can mislead investors, violate accounting standards, or result in non-compliance with legal requirements. By diligently footing the statements, auditors mitigate the risk of such issues and ensure the statements comply with applicable laws and regulations.
  5. Preventing financial statement fraud: Footing is an important control measure that helps deter and detect financial statement fraud. Fraudsters sometimes manipulate calculations and totals to conceal irregularities or inflate financial figures. By thoroughly examining the footed amounts, auditors can uncover any red flags that may indicate fraudulent activities and initiate further investigation or corrective actions.

Overall, the process of footing is crucial to the auditing process as it ensures the accuracy, transparency, and reliability of financial statements. By verifying calculations and totals, auditors contribute to the integrity of financial reporting and bolster stakeholder confidence in the information presented.


Footing Process and Techniques

The footing process in auditing involves a systematic approach to verifying the accuracy of calculations and totals in financial statements. Auditors utilize various techniques and methods to conduct a thorough review and validation of the numbers. Here are some common footing techniques used in auditing:

  1. Manual calculation: Auditors often manually calculate the figures in the financial statements to compare them with the reported numbers. This involves reperforming calculations, adding or subtracting the relevant line items, and verifying that the same totals are obtained.
  2. Electronic spreadsheet review: In many cases, financial statements are prepared using electronic spreadsheets like Excel. Auditors leverage spreadsheet functionalities to perform automated calculations and cross-check the totals. They use formulas, sum functions, and built-in auditing tools to verify the accuracy of calculations.
  3. Sampling: When financial statements are extensive, auditors may use sampling techniques to review a representative sample of the calculations and totals. This saves time and resources while still providing a reasonable level of assurance that the entire set of financial statements is accurate.
  4. Reconciliation: Auditors reconcile the figures reported in the financial statements with the supporting documentation, such as bank statements, invoices, receipts, and other relevant records. This helps ensure that the amounts presented in the statements match the underlying evidence and transactions.
  5. Cross-referencing: Auditors cross-reference information across the financial statements to verify the consistency and accuracy of the numbers. They compare the totals in different sections, such as the cash flow statement reconciling with the balance sheet and income statement, to ensure that they align properly.
  6. Review of subsidiary schedules: Large companies often maintain subsidiary schedules that provide detailed breakdowns of certain line items present in the financial statements. Auditors review these schedules to verify that the totals in the statements accurately reflect the information in the underlying subsidiary schedules.

Throughout the footing process, auditors also document their work, including the calculations performed, the evidence reviewed, and any exceptions or discrepancies identified. This documentation is essential for audit trail purposes and to provide transparency and support for the audit findings.

It’s worth noting that the specific footing techniques used may vary depending on the nature and complexity of the financial statements being audited, as well as the auditor’s professional judgment and applicable auditing standards.

By employing these footing techniques and following a rigorous process, auditors can effectively validate the accuracy and integrity of the calculations and totals in financial statements, ensuring that stakeholders can have confidence in the presented information.


Common Errors in Footing

While the footing process in auditing aims to ensure the accuracy of calculations and totals in financial statements, there are common errors that auditors should be aware of. By being familiar with these errors, auditors can be proactive in identifying and rectifying them. Here are some common errors to watch out for during the footing process:

  1. Mathematical errors: One of the most frequent errors in footing is simple mathematical mistakes. These can include miscalculations, misaligned decimal points, incorrect use of formulas or functions, or transposition errors. Auditors must carefully review each calculation and ensure the accuracy of the arithmetic performed.
  2. Double-counting: Double-counting occurs when a number is included more than once in the calculations, leading to an inflated total. This can happen if a line item is mistakenly included in multiple categories or if a transaction is recorded twice. Auditors need to carefully cross-check the numbers and ensure that each amount is only included once.
  3. Omissions: Omissions involve leaving out important figures or entries from the calculations. This can happen when a line item is accidentally skipped or when a transaction is not recorded. Auditors should check that all relevant data has been included and that nothing has been inadvertently excluded.
  4. Misclassifications: Misclassifications occur when a number is assigned to the wrong category or account in the financial statements. This can lead to inaccurate subtotals and totals, as well as misrepresentation of the financial position and performance. Auditors should carefully review the classification of each amount and ensure that it is appropriately assigned.
  5. Transcription errors: Transcription errors happen when numbers are incorrectly copied or transferred from one place to another. These errors can occur when manually transcribing figures from supporting documentation to financial statements or when inputting data electronically. Auditors should compare the original source documents with the reported figures to identify any discrepancies.
  6. Formula errors: Formula errors can occur when incorrect formulas or functions are used in spreadsheets or software applications. These errors can lead to incorrect calculations and subsequently impact the accuracy of totals. Auditors should carefully review the formulas used and ensure that they are correct and appropriate for the calculations being performed.

It is essential for auditors to remain diligent and vigilant during the footing process to detect and correct these common errors. By having a thorough understanding of the potential pitfalls and implementing robust review and validation procedures, auditors can minimize the risk of these errors compromising the accuracy and reliability of financial statements.


How to Verify Footing Accuracy

Verifying the accuracy of footing in financial statements is a critical step in the auditing process. Auditors employ various techniques and procedures to ensure that the calculations and totals are correct. Here are key steps to verify footing accuracy:

  1. Review supporting documentation: Start by examining the supporting documentation, such as invoices, receipts, bank statements, and other relevant records. Compare the figures presented in the financial statements with the evidence to ensure that they align accurately.
  2. Perform manual calculations: Independently calculate key figures, subtotals, and totals manually. Use arithmetic operations to add or subtract line items and verify that the calculations match the reported amounts. Pay close attention to decimal points, negative numbers, and properly aligned calculations.
  3. Utilize electronic tools: If the financial statements are prepared using electronic spreadsheets or accounting software, take advantage of the built-in features. Use formula functions like SUM and check the consistency of formulas to ensure accurate calculations and totals. Verify that data is accurately mapped and transferred between different sections or schedules.
  4. Cross-check information: Cross-reference information across different sections of the financial statements. Ensure that the totals derived from one section match the corresponding figures in other sections. For example, the net income reported in the income statement should match the retained earnings in the balance sheet.
  5. Reconcile subsidiary schedules: Review any subsidiary schedules that provide detailed breakdowns of line items. Ensure that the totals in these schedules match the relevant amounts in the main financial statements. This step helps confirm the accuracy of the derived data.
  6. Sample testing: If the financial statements are extensive, consider applying sampling techniques. Select a representative sample of calculations and totals and verify their accuracy. Although it is not possible to review every single entry, sampling provides reasonable assurance of the overall accuracy of the financial statements.
  7. Retain documentation: Document all the work performed during the footing verification process. This documentation includes the calculations made, evidence reviewed, any exceptions or discrepancies identified, and the actions taken to resolve them. Retaining this documentation is crucial for audit trail purposes and future reference.

It is important to note that the steps outlined above should be tailored to the specific circumstances and complexity of the financial statements being audited. Auditors must exercise professional judgment and follow applicable auditing standards and procedures to ensure a comprehensive and accurate verification of footing.

By employing these verification techniques, auditors can confidently attest to the accuracy and reliability of the calculations and totals in financial statements, providing stakeholders with assurance and confidence in the reported figures.


Examples of Footing in Auditing

Footed calculations are integral to the auditing process and are widely employed in various financial statement components. Let’s explore a few examples of footing in auditing:

Income Statement: In the income statement, auditors will foot the revenues, expenses, and various line items to ensure accurate calculations. This involves verifying that each revenue and expense category is correctly totaled, taking into account any adjustments or allocations made. Any mathematical errors or misclassifications in these calculations can lead to misstated net income figures.

Balance Sheet: Auditors foot the balance sheet by verifying the accuracy of assets, liabilities, and shareholders’ equity. They ensure that each asset category, such as cash, accounts receivable, and inventory, is correctly calculated and aggregated. Similarly, they review liabilities like accounts payable, loans, and accrued expenses, as well as equity accounts like retained earnings and common stock, to ensure accurate footing.

Cash Flow Statement: In the cash flow statement, auditors foot the various sections, such as operating activities, investing activities, and financing activities. They validate the cash inflows and outflows within each section and verify that the net cash provided or used is accurately calculated. This is crucial to assess the cash flow position of the company and identify any discrepancies in reported cash flow figures.

Inventory Calculations: Auditors foot inventory calculations by verifying the quantities and values of inventory items. They ensure that the opening and closing inventory figures are accurately calculated, considering any adjustments for purchases, sales, returns, write-offs, and obsolescence. Any mistakes or omissions in inventory calculations can result in material misstatements in the financial statements.

Depreciation and Amortization: Auditors foot the calculations for depreciation and amortization expenses by reviewing the useful lives, depreciation methods, and amortization schedules for various assets. They ensure that the annual depreciation or amortization expenses are accurately computed and properly allocated across the relevant periods. Any errors in these calculations can impact the accuracy of the income statement and balance sheet.

Ratio Analysis: Auditors may also apply footing techniques in ratio analysis. They calculate and evaluate financial ratios such as profitability ratios, liquidity ratios, and solvency ratios. These ratios involve aggregating specific financial statement figures and comparing them to assess the company’s financial performance and health. Ensuring accurate footing in these calculations is vital to provide reliable insights and analysis.

These are just a few examples of how footing is applied in auditing different financial statement components. The extent of the footing process may vary depending on the nature and complexity of the statements, but it is a critical step to ensure the accuracy, reliability, and compliance of financial information reported.



In the world of auditing, the concept of “footed” holds significant importance. The process of verifying the accuracy of calculations and totals in financial statements ensures the reliability and integrity of the information presented. By thoroughly reviewing each figure, auditors confirm that the numbers are correctly derived and accurately reflect the underlying data and transactions. This scrutiny enhances transparency, helps identify errors and irregularities, and mitigates the risk of legal and regulatory issues.

To verify footing accuracy, auditors employ various techniques such as manual calculations, electronic spreadsheet review, cross-referencing, reconciliation, and sampling. By following a systematic approach and documenting their work, auditors can effectively validate the calculations and totals in financial statements.

Common errors in footing, including mathematical errors, double-counting, omissions, misclassifications, transcription errors, and formula errors, can compromise the accuracy of financial statements. Therefore, auditors must remain vigilant to spot and rectify these errors during the auditing process.

Examples of footing in auditing can be seen in income statements, balance sheets, cash flow statements, inventory calculations, depreciation and amortization, and ratio analysis. Auditors review and validate the calculations in these components to ensure accurate financial reporting and provide stakeholders with reliable information for decision-making.

In conclusion, footing plays a crucial role in the auditing process by verifying the accuracy of calculations and totals in financial statements. By diligently applying footing techniques and techniques, auditors enhance the reliability and transparency of financial reporting, contributing to stakeholder confidence and informed decision-making.