Question:
I just got my hand slapped for what I think is a minimum risk issue...
I used to do reconciliations for our GL accounts on a monthly basis... if there are any discrepancies I immediately raise it with my boss and start an investigation to correct any errors. This year there was a push to get the boss to sign off on the recs but I haven't been giving it to him to sign. I changed jobs and no longer do this but for about 2 months I have been doing both jobs until they found a replacement for my first job and then I spent 1 month training the newbie. For me, I had to do the major things first and recs were last on my list... BUT, every spare moment I had I squeezed in a rec for one account here and there until all were done, with backup, audit trails, invoices, etc... HOWEVER, I never gave them to my boss to sign (and he did not look for them to sign). Is this really a high risk issue?
(its just frustrating to do so much work and then get told off for something like this)
Answers:
The auditor's job is to find a mistake. You made one. In my opinion, this was genius on your part. By leaving an obvious mistake, you made his visit short and sweet. Auditors tend to be more thorough when they can't find any discrepancies. If you give them something to whine about, though, they are in and out before ya know it.
Auditors would normally look for evidence that reconciliations are reviewed by a person independent of the preparer. The reasons? For adequate segregation of duties and to ensure that your reconciliations are correct .
Preparing a reconciliation without anyone reviewing them is tantamount to not preparing them since what's considered important is the review and not the reconciliation itself.
Reconciliations are very important controls to ensure that your records are accurate and discrepancies are investigated. A good example is a bank reconciliation. Bank reconciliations would catch kiting, lapping, or cash defalcations.
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