Field notes
Reconciling Items That Age Quietly Past Cut-Off
Aged reconciling balances are where audit trails fray. Here is a practical triage for cash, AR, and intercompany clears.
Reconciliations look complete when the difference line is zero. They are not complete when the zero hides items that have rolled for three closes without explanation. Those aged items become the first place external auditors dig—and the first place internal review should look.
Sort open items by age and by owner. Anything older than one full close cycle needs either clearance, a write-off proposal, or a written reason that references source documents. “Waiting on bank” is not a reason after sixty days unless the correspondence is attached.
For intercompany, demand matching evidence from both sides of the group. A common Taiwan group pattern is subsidiary books clearing while HQ still holds a suspense balance. Your audit trail should show both ledgers or explicitly state which entity owns the residual.
Build a short appendix to the reconciliation pack: item, age, owner, next action date. Controllers who keep this appendix find fewer surprises when the close window shortens around Chinese New Year or year-end consolidation.
If aged items dominate your binder, a Reconciliation Evidence Workshop can reset standards with the people who actually prepare the packs—not only the people who sign them.