What is an internal control for end of month and fiscal year-end close procedures?

 End of Month and Fiscal Year-End Close

1.      The Owner/President will review and sign off on all month- and year-end journal entries. They will be printed and filed for audit trail purposes. The Audit Manager will perform these duties for clients.

2.      At the end of each month and fiscal year end, the Owner/President  or Audit Manager will review all balance sheet accounts including verification of the following balances: cash accounts match the bank reconciliations, fixed assets accounts reflect all purchases, write-downs and retirements, accounts receivable and payable accounts match outstanding amounts due and owed.

3.      The income and expense accounts review will include reconciliation to amounts received and expended and verification that payroll expenses match the payroll reports including federal and state payroll tax filings.

4.      Once the final monthly and fiscal year-end financial statements are run, reviewed, and approved by the Owner/President or Audit Manager, no more entries or adjustments will be made into that month or year’s ledgers.

5.      At the end of the fiscal year, the Owner/President will prepare the annual Return for the firm. The Audit Manager will perform this function for clients. The return will be presented to the client representatives for their review and approval. The Audit Manager or client staff will then file the return with the Internal Revenue Service by the annual deadline.

6.      All other appropriate government filings including those required by the state tax board and attorney general’s office will be completed and filed with the appropriate agency.