How bad is it to use the "remove & redo" function

"Remove & Redo" function in Xero: Looking for expert advice on this function

Didn't find your answer?

Just trying to find if there are Xero users and who have used the "Remove & redo" function. Our external auditors are insisting that we shouldn't use this function at all because they claim that there is a risk of fraud (which I have proven to them that there no risk of fraud at all because the transaction removed has to be re-entered and that you cannot change the date and amounts) and they also claim that there is no clear audit trail in Xero to show the deleted transactions. To the extent that they have even suggested that I need to tell Xero to remove the function (ridiculous of course). I have tried to argue that not all transactions can be corrected by a journal and hence why we use that function. I contacted Xero and they basically said the same. So here is the Q. A transaction that was supposed to be posted as Bank Transfer was entered as a receipt. So to reverse this transaction I would have used the "remove and redo" function but because I am barred from using it, the auditors have said I should enter a manual adjustment as Spend Money to reverse that original Receive Money transaction. Is this a good practice to be entering manual adjustments on the bank statement? Would you recommend the use of a manual adjustment on the bank statement than just using the "remove and redo" function? I am quite wary of using this approach as I always believed that the bank statement shoudl be a mirror image of what has actually transpired on the bank account. Do you think there is a risk of fraud by using this function, because I am arguing that there isn't. Please help! We have had this conversation for months now and it does seem to be coming to an end. They are also against using the edit function like when you want to correct the date of posting a transaction or description to do with a transaction. Our business relies on donations so sometimes we don't always know who has given us money.

Replies (7)

Comments for this post are now closed.

Danny Kent
By Viciuno
09th Jun 2022 20:18

As an accountant, and having only studied auditing (so read this as someone who has no idea) it sounds like your auditors are talking out their [***].

Why would manually entering made up transactions into a bank feed be less risky than the remove and re-do function? Do they even know what it does?

Also, if you want a proper audit trail from an invoice to a bank payment you need to match it to the original transaction - not a made up one.

I thought we were also told that Auditors we not looking for fraud? More importantly how does the use of remove and redo facilitate fraud?

Actually, the more I think about this the more it seems that your auditors have no idea what they are talking about. Are you talking to a junior, senior, manager or a partner? Try and see if you can speak to someone with proper authority who know what they are talking about.

There was a similar thread on here a wee while ago about exactly the same thing (remove and re-do) but it was some letter that the auditors sent out and I'm sure plenty of auditors replied saying the auditors were talking rubbish RE remove and redo.

There was someone who posted to say that they regularly audit companies that use Xero and the remove and redo wasn't an issue (was this the person with the communist flag as an aviator? Sorry if it isn't!)

Quick search of the site should bring it up.

P.S Paragraphs would make your questions easier to read. The wall of text is really offputting!

Thanks (1)
Replying to Viciuno:
avatar
By Paul Crowley
09th Jun 2022 20:51

I think you will find a change in opinion
Used to be: Watchdogs not bloodhounds.
Now it is: blame the auditor in everycase because the auditor has deep pockets and insurance

A point of interest
I marked audit examination scripts for ICAEW for about 5 years, but that was a long time ago

Thanks (0)
Replying to Viciuno:
avatar
By Hugo Fair
09th Jun 2022 20:55

Not just a similar post ... https://www.accountingweb.co.uk/any-answers/remove-and-redo-edit-transac... ... but posted by the same person!

Perhaps OP can explain what has changed in intervening few weeks?

Thanks (2)
Replying to Hugo Fair:
avatar
By Adeline
09th Jun 2022 21:13

Yes its me who posted a few weeks ago and the issue is still unresolved. FYI: The auditors have been auditing our books for 3 years and made a false claim when reporting to the ARC committee that this is the first time that the function has been used and actually give the impression that this is something that I had started. So I had to run an audit trail of all the deleted transactions before my time and to e honest it was an embarrassment to them though it left me emotionally wounded. To the extent that one of the ARC members actually suggested that we ask Xero to remove the function but then Xero said No, this is a permanent system function.

Thanks (0)
Replying to Adeline:
avatar
By Paul Crowley
09th Jun 2022 21:52

False claim?
Do you mean erroneous?
False carries with it a degree of deliberate error
Auditors do test checks, not look at every entry
Chances are they had not noticed before

ARC committee not auditor that suggested the function be disabled?

Definitely time to change auditors or find a way to get things right first time. Fighting a war for the ability to continue with this function is not doing anything posative for your wellbeing

The Red Barron would not start an airborne duel unless he knew he was going to win. He often chose to just sweep down with two wingmen on unescorted damaged aircraft. He was not a heroic fighter, he was a calculating skilled destoyer of enemy aircraft, who was actually shot down not in aerial combat but by a machine gun on the ground

If you really want to win this battle then do what the auditor suggests and record the extra time it takes
Trustees then make a decision, and changing auditors is the cheapest

Thanks (0)
Replying to Adeline:
avatar
By Leywood
10th Jun 2022 11:02

Why then did you not post this on the first question, or if its recently come up just post this information in the original post (with paragraphs). Keep posting stuff because its unresolved will not help to resolve it. Youve had an answer from the software company so you can throw that back at them.

'Made a false claim'. If that is the case then dump them and get new auditors. Although you might want to be careful making such assertions on a public forum.

Why would you be 'emotionally wounded'? Sounds like you need to toughen up a bit. Maybe get some help from your professional body about how to deal with the perceived daft things they are throwing at you and how to build some emotional resilience.

Thanks (1)
Replying to Viciuno:
avatar
By Paul Crowley
09th Jun 2022 21:10

https://www.accountingweb.co.uk/any-answers/remove-and-redo-edit-transac...

similar heading and same OP
I did not even read last time as I looked at just the Heading and assumed it was a Xero question

Thanks (0)