How to improve account reconciliation activities

October 2007
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How to improve account reconciliation activities: Financial services: PwC

At a glance

Account reconciliations are typically identified as a key internal control activity for Sarbanes-Oxley compliance, and many larger companies have even identified reconciliation as a significant transaction activity in itself. As companies consider changes to account reconciliation activities, it is important to embed appropriate internal controls in the process in a consistent and standardized way.

Effective management of account reconciliation activities greatly increases executives’ ability to proactively identify and resolve issues that could result in misstatements in financial accounting and reporting records and lead to substantial write-offs. This article explores common, recurring problems with account reconciliations and the practices that can improve their effectiveness and efficiency.

Many common account reconciliation problems are preventable. By creating and putting in place appropriate reconciliation and information management processes, and improving organization, training, and automation, companies can gain assurance over their general ledger balances.