Skip to the content

Auditing and Accounting Terms

What are Material Errors in Financial Statements

“Companies with material weaknesses were 80% more likely to have future fraud disclosures compared to firms with strong controls.”Internal Control Weaknesses and Financial Reporting Fraud, AmericanAccounting Association (Aug 2017) What is a Material Weakness? A material weakness is a failure in the internal control mechanism that ensure financial rules and processes are fol ...

What is the GL Reconciliation Process?

Why Companies Need to Reconcile their GL Balances? General ledger balances are summary totals that: Represent all the transactions generated by the running of a company Are carried through into the company balance sheet Based on the numbers in the balance sheet: Bankers lend money to the company  Company directors steer the business Investors decide to invest in th ...

What is The General Ledger

The General Ledger - A Global View The general ledger (or GL) is a record of every single financial transaction a company makes during a financial year. The GL is composed of every individual accounts required to record assets, liabilities, revenue and expense transaction in an organization. The general ledger is made up of many individual accounts that represent a summary of ...