In order to enhance controls, reconciliations should be performed by company personnel who are independent from the tasks of initiating or recording the transactions with the accounts being reconciled.

Question

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This is because independent personnel can provide an objective and unbiased review of the transactions and account balances, which helps to identify errors or discrepancies and prevent fraud or financial misstatements. If the same individuals who are responsible for initiating or recording the transactions also perform the reconciliations, there is a higher risk of errors or fraud going undetected, and there is a lack of segregation of duties – one of the fundamental principles of internal control.

In Order to Enhance Controls, Reconciliations Should Be Performed by Company