Audit & Risk Advisory
In accounting parlance, the process used to compare two sets of records to ensure the figures are in agreement and are accurate is termed as Reconciliation. It is the key process used to determine whether the money leaving an account matches the amount spent, ensuring the two values are balanced at the end of the recording period. A critical element of the reconciliation process is to resolve differences. It does not do any good to note differences and do nothing about it.
You need to identify, investigate, explain and take corrective actions. If expenditure is incorrectly charged to a department& accounts, then the approver should post a correcting journal entry; the reconciler should ascertain that the correcting journal entry was posted. It is important that Reconciliations should be documented and approved by management.
At My Office Accountant we take up various Reconciliation Audits of your Inventory, Fixed Assets, Vendors, Banks etc.