This audit report focuses on reducing intercompany out-of-balance differences to an immaterial amount.
In this example, internal audit partnered with the company to successfully bring the out-of-balance difference below a specified amount for the monthly close. The top issues included were: accounts receivable and accounts payable populations (no stake in the ground), inconsistent month-end reconciliation methodology, lack of communication strategy and policy regarding manual journal entries, inconsistent global communication, and lack of process ownership. However, many open items still remained and the risk of material misstatement and potential losses reoccurring in the future remained high. Senior finance management had concerns as to whether the processes were adequately controlled and lacked confidence that this will not reoccur.