ACCOUNT RECONCILIATION POLICY

INTRODUCTION

This procedure document concerns the company’s general ledger balance sheet account reconciliations. Account
reconciliation is a key internal control that facilitates the timely reporting of complete and accurate information in
the general ledger and the financial statements. The account reconciliation process's timeliness can help identify
and correct errors before quarterly or annual financial statements are prepared. All balance sheet accounts should
be reconciled, reviewed and approved for each monthly accounting period.

PROCEDURES

ACCOUNT RECONCILIATION
• Each balance sheet account should be reconciled monthly unless the controller approves an exception.
• The reconciliation should be done in a consistent format from month-to-month.
• The reconciliation should indicate all transactions included in the general ledger balance at the end of the
month. Every item in the reconciliation should clearly explain what it is and how it relates to the account
balance.
• A report from ORACLE showing all transactions during the month and month-end balance should be attached
to the account reconciliation. Suppose the nature of the account is such that the account does not represent a
group of detail items. In that case, the appropriate support is a detailed calculation of the proper account
balance. The exact nature of the supporting documentation will vary account by account and will be mutually
determined by the reconciler and the financial reporting manager or controller. The reconciler should maintain
sufficient documentation to support each item comprising the balance in the general ledger.
• The reconciliation should indicate the general ledger balance at the end of the month and identify each item
comprising the difference, if any, between the general ledger balance and the account reconciliation balance.
• The reconciler should identify the corrective steps taken to clear each reconciling item (note the journal entry
number, etc.) or provide a commitment date when the item will be cleared. Reconciling items should be
cleared before immediately following external reporting requirements or the same month if the month
represents a quarter-end month.
• In reconciliations for accounts receivable, accounts payable or other accounts requiring aging, reconcilers
should provide explanations for balances equal to or greater than 90 days outstanding.
• The bank reconciliation process involves comparing cash balances in the general ledger cash accounts to the
amounts reported on the bank statements, identifying reconciling items and analyzing any differences. The
reconciliation accountant prepares entries for identified corrections that need to be made in the accounting
system and entries for interest income and bank charges for review, approval and input into ORACLE.
• The reconciliation will include a sign-off by the preparer and reviewer, along with the date the reconciliation
was prepared and reviewed. By signing off, both the preparer and reviewer acknowledge the following:
− The reconciliation has been reviewed in detail and/or steps re-performed, as necessary.
− The reconciliation has been prepared in accordance with this procedure.
− All reconciling items have been properly identified, along with the appropriate action plan for follow-up and
timely resolution.
− All significant adjustments and stale-dated reconciling items have been reported to the appropriate party so
that the potential impact on the financial statements may be assessed. The individual amounts that
comprise the ending general ledger account balance are accurate, reasonable and complete.
• There must be a separate preparer and reviewer.

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• A copy of each reconciliation should be turned in as a hard copy or scanned and sent via email.

Key Control CLOSE-1: Monthly, all account reconciliations are reviewed and approved by the financial reporting
manager or controller. The reconciliations are reviewed to ensure that the account balances are appropriate, that
reconciling items are identified and resolved promptly, that the reconciliation is performed correctly, and that the
supporting schedules (e.g., TB summary) are mathematically accurate and attached to reconciliation. Evidence of
review and approval by the financial reporting manager or controller is indicated by initialing and dating the
specific account reconciliation.

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