Finance How To Trace Bank Statement And Financial Statement Inconsistencies?

[Good-Guy]

Many businesses have their own bank accounts and business owners usually title the name of the account with the name of their business and the bank account balance becomes the main source of transactions and cash flow of a business when it comes to paying salaries, expenses, or paying customers. On the other hand, financial statements are also prepared by the corporations to keep a proper record of payments, expenses, income, etc. Every thing would go smooth until the bank statement suddenly becomes inconsistent with the financial statements of company. The bigger the business becomes, the more difficult it becomes to trace and reconcile the difference between the two records. So, if you ever get into such a situation, what would you do to reconcile the two things?

 

[btaliat]

What will cause the inconsistencies? I don't agree that financial statements must differ from bank accounts as the business grows bigger. But what most big companies do is to employ the service of auditors to audit the account and identify the any discrepancies that may occur in the course of posting the transactions.

 

[Good-Guy]

What will cause the inconsistencies? I don't agree that financial statements must differ from bank accounts as the business grows bigger. But what most big companies do is to employ the service of auditors to audit the account and identify the any discrepancies that may occur in the course of posting the transactions.

Financial statements are made to record all the the business transactions that took place in the bank accounts of busines as well. Many businesses have cash in their branch and they pay some of their cutomers through cash and this way many customers never need to go to bank to get their money. However, whenever a company issues a check, it is recorded by both accountant of the company and the bank as well. Sometimes, such transactions are not recorded in the financial statemments due to human error or forgetfulness.

 

[Suba]

I am more familiar with using the term difference between a company account balance and a bank account balance rather than inconsistencies, My experience If at the end of the month we (the company) receive a bank statement, the company accountant's job is to prepare a bank reconciliation, which is useful for tracing the traces of all financial transactions between the bank and the company, so that differences between company accounts and bank accounts will be disclosed immediately, this difference often occurs because deposits in the process have not been recorded by the bank, checks out that have not been taken by the beneficiary, bank charges, interest earned etc. The duties of both internal and external auditors are certainly different from corporate accountants, the auditor's job is only to check the feasibility of financial statements that are presented fairly, in this case the auditor will only make bank confirmations that the balance is appropriate or not.

 

[Yusra3]

To identify discrepancies between a bank statement and financial statement, carefully compare deposits, withdrawals, interest earned, fees charged, electronic transfers, and ending monthly balances between the two reports, matching dates and amounts on each transaction. Investigate the payee/source and nature of payments on all mismatched records. If discrepancies indicate errors or attempted fraud, contact both the bank and an accounting forensics professional to resolve the issues.