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Investment Reconciliation checklist
Verify Holdings
Compare the quantity of each investment held as per the accounting records with the corresponding position reports from the broker or investment manager.
Ensure that all investment holdings are properly recorded at the correct valuation as per the relevant accounting standards.
Investigate and reconcile any discrepancies in investment quantities or valuations between the accounting records and the position reports.
Review Transactions
Match all purchase and sale transactions recorded in the accounting system with trade confirmations from the broker or custodian.
Verify that all dividends and interest income are accurately recorded and reconciled with bank statements or custodian records.
Check for any corporate actions affecting securities held and ensure that these are appropriately recorded in the accounting records.
Assess Unrealized Gains/Losses
Calculate and review unrealized gains or losses on investments based on the current market value compared to the original cost.
Ensure that changes in unrealized gains or losses are recorded according to the applicable accounting framework (e.g., IFRS, GAAP).
Analyze the impact of any significant market movements on the investment portfolio and ensure proper disclosure in financial statements.
Evaluate Investment Income
Reconcile all investment income (interest, dividends) received during the period with the investment records.
Review the appropriateness of accruals for investment income not yet received but earned during the reporting period.
Ensure that any withholding taxes on investment income are properly accounted for and reconciled.
Check for Compliance
Confirm that all investments comply with the organization's investment policy and any regulatory requirements.
Review the documentation for any new investments to ensure they were authorized according to the organization's internal control procedures.
Examine any investment restrictions or covenants and verify that the organization is in compliance with them.
Document and Report Findings
Prepare a detailed reconciliation report summarizing all findings, discrepancies, and unresolved items.
Present the reconciliation report to management or the audit committee for review and action.
Update the reconciliation procedures and controls based on lessons learned from the current period's reconciliation process.
