Definition of Account reconcilement:
The Sarbanes-Oxley Act of 2002 established parameters for corporate account reconcilement. Prior to Sarbanes-Oxley, accounting standards did not account for the need to apply best practices to account reconcilement. Now, companies are held to much higher standards for internal controls and audit procedures.
Account reconcilement is the process of confirming that two separate records of transactions in an account are equal. Both institutions and individuals perform account reconcilement. At the institutional level, banks and brokers must internally review transactions between their general ledger entries and individual account records. Account reconcilement can help organizations pinpoint errors in accounting that could indicate mistakes, miscalculations, or cash leakage. Thanks to computer automation, this process is much faster than it once was.
Comparing an account statement (or bank statement) with ones own accounting records, to detect any discrepancies that may indicate leakage of cash, slack accounting controls, or an error.
How to use Account reconcilement in a sentence?
- Account reconcilement in banks is a regulatory and compliance function.
- Institutions and individuals perform account reconcilement in balancing checkbooks and making sure records match statements.
- Account reconcilement confirms that two transaction records are equal and balanced.
Meaning of Account reconcilement & Account reconcilement Definition