I'm looking for procedures for doing secondary review on corporate account reconciliations that come from the accounting department (ie ACH, debit card, credit card, check register, ATM, etc). Can anyone help me out? Just wondering other auditors are looking for and how they perform such reviews.

In our environment, corporate activities are subject to monthly reconcilement with those reconcilements subject to review by auditors and outside entities. The primary issue to look at is transaction exception management. Old items need to be charged-off in a timely manner.

We are starting to require that all reconciliations be reviewed by the applicable department supervisor. Internal audit reviews all reconciliations of internal DDA accounts and balance sheet accounts either quarterly or semi-annually, depending upon the risk involved with the account.

We also require a second review/signature of the reconciliation by a knowledgable supervisor. Audit will also test, based on a targeted threshold limit, support for outstanding reconciling items and cleared reconciling items for the audit period. For Example, I would get 2-3 month end reconcilements and test both outstanding and cleared items from one month to the next to ensure there was some sort of documentation/support for the original entry and the subsequent clearing if applicable.

During the quarterly / semiannual review of reconcilements that I mentioned in my previous post, we also test outstanding items above a certain threshold. We do, however, do a more thorough review during specific functional audits. For example, we review loan reconcilements quarterly and research outstanding items that are above a certain threshold. During the scheduled loan audit, we review and validate the reconciliation in more depth.

One thing we are also looking at is doing surprise audits of reconciliations on odd days in addition to the quarter end reviews.

If you are with ITI, system reconcilement and review is a simple matter as the ITI system produces a variance report listing any variances between the loan/deposit modules and the GL with even year to date interest included. It's a wonderful tool.