The AI reconciliation balances. Is it right?
An unexplained adjustment can make a wrong reconciliation look complete.
“reviewing a cash reconciliation produced by an AI tool.” (opens the source)
The question
At fictional North Quay Manufacturing in Manchester, you review an AI-assisted cash reconciliation. You are the audit associate; the finance team owns the accounting records.
| GBP | |
|---|---|
| Ledger cash before posting | 150000 |
| Confirmed bank payments not in ledger | 8000 |
| Bank statement balance | 142000 |
| Unsupported adjustment added to both sides | 4000 |
Invented data. The bank payments have cleared; they are not outstanding cheques.
- AI draft
- The tool subtracts the GBP8,000 payments from the ledger, then adds a GBP4,000 “timing adjustment” to both sides.
- Evidence
- There is no bank statement, invoice or ledger entry supporting the GBP4,000 adjustment.
“Would you mark this reconciliation complete? What do you do with the unexplained adjustment?”
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A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: Rebuild the simple bridge
What would you do here? Open the move you’d make.
Accept the reconciliation because the totals match.
Tempting, but it misses something. A fabricated item can be added to both sides and preserve equal totals.
Rebuild the bridge and trace every adjustment.
The strong move. Equal totals are not enough; each reconciling item needs a real basis.
See how a strong candidate says it
“GBP150,000 minus GBP8,000 equals GBP142,000. The confirmed unposted bank payments explain the difference without the extra GBP4,000.”
Why it works: Equal totals are not enough; each reconciling item needs a real basis.
Step 2: Trace the adjustment
“Inspect the source records and ask where the GBP4,000 came from. Do not create evidence to support the generated item.”
Why it works: An invented adjustment can survive a check that only compares final totals.
Step 3: Keep the right person responsible
“Ask management to explain or correct its reconciliation. Keep the auditor’s review separate from management’s accounting decision.”
Why it works: The reviewer needs the evidence and the open question, not just “AI made a mistake.”
Step 4: Close the review trail
“Record the unsupported item, the correction and the review. Add a check that each adjustment links to a source record.”
Why it works: The next reviewer must be able to follow the decision.
The answer, in short
- Decision
- Do not sign off the draft. Resolve the unsupported GBP4,000 item and document the valid cash bridge.
- Because
- The confirmed GBP8,000 bank payments already explain the balance difference.
- What would change it
- A genuine, independently supported timing item would need its own accounting analysis; it should not be rejected merely because AI proposed it.
Common traps
- Accepting the result because both sides match.
- Inventing a reason for the adjustment.
- Deleting the item without leaving a review trail.
Check your answer
- Did I rebuild the GBP8,000 bridge?
- Did I trace the GBP4,000 item to evidence?
- Did I respect the reviewer and management roles?
- Did I leave an auditable correction?
Last reviewed Nov 10, 2026