Which process is used to verify the integrity of financial updates by comparing expected results to actual results?

• A. Budget Review
• B. Reconciliation
• C. Financial Audit
• D. Inventory Check

Answer: (C)

Reconciliation is the process of verifying data integrity by cross-checking two sources of financial information and ensuring they match. By comparing what the records should show (the expected results based on transactions, approvals, and forecasts) with what actually appears in the accounts (the actual results), you can spot and correct discrepancies, keeping the financial system accurate and up-to-date. This practice is common in bank reconciliations, where the bank statement is matched against the company’s ledger, and in various sub-ledger reconciliations to the general ledger.

Budget reviews look at performance against the plan but don’t focus on verifying the integrity of the updates themselves. A financial audit involves an independent assessment of financial statements and controls, which is broader than the routine verification of updates. An inventory check examines stock levels versus records, not the integrity of financial updates.