Journal Entry Review & Approval Checklist Template

What the Journal Entry Review Checklist Covers

1. 1
   Phase 1

   Phase 1: Extract & Prove the Journal Population

   6 tasks

   A review of a filtered report proves nothing about the entries the filter left out. Start from the complete listing.

   • Confirm the journal posting cut-off for the period has passed — subledgers closed and no further routine entries expected
   • Export every journal posted to the period — with preparer, approver, posting date, entry date, source, accounts, amounts and description
   • Prove the listing is complete — agree total debits and credits, and the net movement on each account, to the trial balance
   • Tag each entry by type — system-generated, recurring, non-recurring manual, reversing, top-side or post-close
   • Record whether any top-side or post-close entries were made — answer Yes or No; Yes adds Phase 5 to this month’s checklist
   • Record whether this is a quarter-end or year-end close — answer Yes or No; Yes adds the access review in Phase 6
2. 2
   Phase 2

   Phase 2: Check Preparer–Approver Separation

   6 tasks

   • Confirm every manual entry has a named preparer and a different approver — list any entry that was self-approved or has no approver recorded
   • Check each approval against the authority matrix — the approver’s limit by amount, entity and account type
   • Confirm each approval came before the entry posted — compare the approval date with the posting date
   • List entries posted by people who don’t normally post journals — senior managers, IT administrators, external users and system accounts
   • Look for entries split to stay under an approval limit — several entries to the same accounts on the same day, each just below the threshold
   • Record each exception and how it was resolved — retrospective approval, correction or escalation to the controller
3. 3
   Phase 3

   Phase 3: Review Support & Accounting

   6 tasks

   • Check that every manual entry has support attached — a calculation, contract, invoice, reconciliation or email that justifies the amount
   • Read the descriptions — each one should say why the entry was made, not only which accounts it touches
   • Validate accounts, cost centres and periods — no postings to control accounts, closed periods or the wrong entity
   • Recalculate estimates and accruals above the review threshold — and compare the assumptions with last month’s
   • Check recurring journals against their templates — amounts that changed, and contracts or leases that have ended
   • Confirm reversing entries reversed once, in the right period — none left standing and none reversed twice
4. 4
   Phase 4

   Phase 4: Scan the Population for Risk Indicators

   6 tasks

   Auditors apply the same kind of filters, so run them first.

   • Filter for entries to unusual or seldom-used accounts — including accounts with no other activity this year
   • Filter for round amounts and repeated ending digits — such as 50,000.00 or several entries ending in 999
   • Filter for entries posted at unusual times — weekends, holidays, late at night or after the draft accounts were produced
   • Filter for entries with blank, vague or duplicated descriptions — “adjustment”, “per CFO” or the same text on unrelated entries
   • Review entries to high-judgement accounts — revenue, reserves and provisions, suspense, intercompany and unreconciled accounts
   • Obtain support for every entry the filters select — and add unexplained ones to the exceptions log
5. 5
   Only If Needed

   Phase 5: Top-Side & Post-Close Entries

   4 tasks

   Shown only when Phase 1 records top-side or post-close entries. These bypass the subledgers, so they get individual review.

   • List every top-side and post-close entry with its reason — consolidation adjustments, audit adjustments and late corrections
   • Confirm each was approved by the controller before posting — and by the CFO above your top-side threshold
   • Confirm any reopening of a closed period was authorised — and that the period was locked again afterwards
   • Push top-side entries down to the entity ledgers — or track them so they are not needed again next month
6. 6
   Quarterly

   Phase 6: Journal Access Review

   5 tasks

   Shown at quarter-end and year-end. Segregation of duties in the approval flow depends on who can do what in the system.

   • Export the list of users who can create, approve or post journals — from the accounting system, not from the HR directory
   • Remove leavers and people who have changed role — and confirm the removal took effect
   • Identify users who can both prepare and approve or post — document the compensating control for each one who must keep both
   • Review journal activity by administrator and shared accounts — these should post nothing, or only system-generated entries
   • Controller approves the access list — Approved or Not approved, with the export attached
7. 7
   Sign-Off

   Phase 7: Resolve Exceptions & Controller Sign-Off

   4 tasks

   • Summarise the exceptions log — each exception, its cause, its resolution and any entry that still needs action
   • Post correcting entries through the normal approval route — never as a post-close entry approved by the preparer
   • Agree control improvements for repeated exceptions — a tighter limit, a mandatory attachment or a system restriction
   • Controller reviews and signs off the journal review — Approved or Not approved; the checklist stops until it is answered