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Why would an auditor reperform a bank reconciliation?

Almost every single company prepares bank reconciliations at the end of each month. Bank reconciliations help a company reconcile their bank statement to the activity in their financial records and verify that all of the activity has been captured. Well guess what, bank reconciliations are a critical control in the company’s system of internal controls.

So when the auditors come around, they’ll want to assess whether the company’s bank reconciliation control is operating effectively. The best way for the auditor to assess this is to actually “reperform” the bank reconciliation and see if they arrive at the same conclusion. This means that the auditor would obtain the bank reconciliation that was prepared by the client, and perform the same steps that the client did.

In addition, reperforming the bank reconciliation is needed to substantively test the bank balance at the end of the year. The audit team would send confirmations to confirm the bank balance, but the auditor would need to use the bank reconciliation to reconcile the bank balance with the book balance. So in essence, the audit team would test the bank reconciliations for internal controls and to gather evidence for substantive testing.


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