Cancelled Checks
When I receive copies of canceled checks, I’m curious why my manager insists that I trace them back to the bank statement. Since they are canceled checks, shouldn’t we already know they’ve been cashed and cleared?
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Cancelled checks
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Your manager likely wants you to trace the cancelled checks to the bank statement for a few reasons:
Verification: Even though the checks are marked as cancelled, double-checking against the bank statement ensures that all transactions are recorded accurately. It helps confirm that they match what is in the Accounting records.
Reconciliation: Tracing checks to the bank statement is an essential part of the reconciliation process. It helps identify any discrepancies or errors between your records and what the bank has on file.
Fraud Prevention: Verifying cancelled checks against the bank statement can help catch any potential fraudulent activities or unauthorized transactions that may have occurred.
Comprehensive Recordkeeping: Maintaining thorough records is crucial for both internal audits and external reviews. It demonstrates diligence and accuracy in financial reporting.
Overall, while it might seem redundant, this step is a helpful practice to ensure financial integrity and accuracy.