Ledger Review Checklist and Cheat Sheet
Ledger Review in Summary:
What is it? – Evaluation of information to determine validity of charges and credits.
 Review for currency, accuracy, completeness and compliance
 Document significant differences for corrective action or follow-up – Timing differences, errors, noncompliances
 Use a risk-based approach to concentrate effort on high risk areas and transactions
When do we do it? – Key control activity to be performed after the end of each month.
Why do we do it? – Timely account reviews are critical departmental internal control responsibilities.
 Must have a process in place to detect significant errors and omissions
 Last line of defense for accurate reporting – Lack of reviews could result in material misstatements in financial reporting/billing
 Potential audit findings – Lack of timely account review and missing evidence of review and sign-off fails test of key control
How do we do it? – Gather relevant internal and external reports, data, and documents; use a risk-based approach to review; prepare
a summary GL Review document that identifies summary totals and follow-up items; sign, date, and obtain review and sign-off from
separate manager/peer reviewer. Transaction verification items include but are not limited to: salaries, expenses, encumbrances,
amounts, account and sub-account classification, description of expense, unallowable costs and accounting/reporting period.
Specific Steps
Get Data:
 Information from previous month GL review
- Ending balances
- Corrective action and follow-up items
 General Ledger Information
- Fund Summary
- Detail General Ledger
 Payroll Information
- Payroll Distribution
- Internal source documents (If necessary and based on risk)
 Offer letters or other supporting documentation
 Approval documents
 Accounts Payable Information (If necessary and based on risk)
- Invoices
- Departmental order information/authorization
 Encumbrance Information – Open Commitment Subsidiary Ledger
 H&I Invoice Status Report – Items that are on Hold or Incomplete
Review Data:
 Compare budget to actual expenses and document whether expenses are according to plan
 Review expense items based on risk (materiality, unusual items, unexpected activity/items, etc.)
- Document as you verify items
- Identify items requiring further review and follow-up
- Keep backup with GL review or reference location
 Verify Payroll Distribution totals to General Ledger totals – Compare summary totals to identify differences
 Verify Payroll Distribution detailed items based on risk (materiality, new employees, unusual activity)
- Review employee names and pay details for unusual activity or unexpected items/types of pay
 Rates, hours, percentage time, salary changes for unusual activity or unexpected items/types of pay
 Employee names for unknown/potential ghost employees or employees in wrong accounts
- Identify items requiring further review and follow-up
- Keep backup with GL review or reference location
 Verify that previous month follow-up items cleared and errors were corrected, or not
 Document new follow-up items in summary to carry forward (timing differences, errors, etc.)
 Request of updates/corrections or document status (timing difference, waiting for journal, etc.)
 Sign and date summary sheet (can be electronic)
 Obtain review and sign off from supervisor or peer reviewer (can be electronic)
 File and maintain documentation for audit purposes
Updated 10/08/2014, SAI
Completed