Reconciliation is the process of comparing data from two or more sources to verify that they agree, and investigating and resolving any differences identified. In financial reporting, reconciliation typically involves comparing balances or totals between source systems and destination systems — such as comparing a sub-ledger to the general ledger — or comparing an internal report to an external statement. Reconciliation is a fundamental control process that provides assurance that financial data is complete, accurate, and consistent between systems.
Why This Matters
Reconciliation provides the evidence that data has travelled correctly through reporting systems without being lost, duplicated, or corrupted in transit. Without regular reconciliation, discrepancies between systems can accumulate undetected — each small difference seemingly immaterial, but collectively resulting in management reports that do not accurately reflect the underlying transactions. Reconciliation is a non-negotiable control in any reliable financial reporting environment.
Where This Fits
This term sits within the Governance & Data Trust area of Performance & Control.
Related Terms
Related Knowledge
To be added when relevant Knowledge Hub articles are published