Account reconciliation certification is the period-end process in which a preparer reconciles each balance sheet account to independent evidence, a reviewer approves the result, and both sign off that the balance is complete, accurate and supported.
Account reconciliation certification turns a reconciliation into evidence. The reconciliation compares the ledger balance with a supporting source, such as a bank statement, a subledger, a supplier statement or a fixed asset register. The certification adds ownership: a named preparer, a named reviewer, a date, and a documented explanation for every reconciling item.
A certified reconciliation records five elements:
- the general ledger balance and the supporting balance at period end
- each reconciling item, with its explanation and expected clearing date
- the preparer's sign-off
- the reviewer's approval, given by someone other than the preparer in line with segregation of duties
- the attachments that prove the supporting balance
Certification frequency follows risk rather than habit. High-risk accounts such as cash, receivables, payables, intercompany and accruals are usually certified every month, while low-activity accounts may be certified quarterly. The weak point is ageing: a reconciling item explained the same way for three periods is not reconciled, it is carried forward, and auditors test precisely those stale items. The same discipline applies to subledger to GL reconciliation.
Phacet produces the evidence that certification depends on. The agent that can reconcile bank transactions and detect unmatched flows clears the cash accounts, the agent that can reconcile intercompany flows handles intragroup balances, and every match and exception carries a native audit trail, so the reviewer approves documented work instead of re-performing it.
