NOTE: How to Document #703 – Internal Audit Review – has worksheets you can use to help you do the comparisons suggested below. Also see How to Document #707 - 3 Way Reconcile.
There are two kinds of audits - internal and external. An internal audit is you doing the tests, checks and balances that an external auditor might perform. A monthly review should assure you that from a bookkeeping viewpoint all is well.
All bank accounts should be reconciled with the bank statement on a regular basis.
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It is best to do it as soon as possible after receiving the statement. Performing an audit is not dependent on reconciling the bank statement but there is a higher probability of error in the audit if the bank reconciliation has not been done.
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Print the report and post the reconciliation.
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Reports to run as of the last day of month or for a period:
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Ledger Reports, Ledger Balances - include inactives, filter on balance not = 0, sort by balance
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Bank Reports, Bank Balance Breakdown
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Bank Reports, Check Register
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Bank Reports, Deposit Register
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Bank Reports, Bank Activity
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GL, Reconcile Bank Account, Reconciliation Report after reconciling each bank account
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Review the list of "Uncleared Deposits and Other Additions" and "Uncleared Checks and Other Subtractions" for items that will never show up on a future bank statement.
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Ledger Reports, Balance Sheet - consolidate for all ledgers (be sure to include inactives)
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Ledger Reports, Ledger Analysis
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Tenant Reports, Tenant Balances, Limit to Balance - Open Credits not equal to 0.
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Unit Reports, Rental Analysis
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Things to look for on the reports:
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Ledger Balances - scan down the balances - are any negative?
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Tenant Balances - are there tenants with open credits and unpaid charges? Should those open credits be used to pay off charges?
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Bank Balance Breakdown - are there any negative balances? Any unreconciled items that will never be seen by the bank?
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