Broker Bob elects to use the Closing Disclosure as a substitution for a reconciliation statement. Is Bob in violation of a Commission Rule. Yes, because he did not do the reconciliation.
In the accounting process of reconciliation, two sets of records are compared to ensure that the numbers are accurate and consistent. Additionally, reconciliation verifies the accuracy, consistency, and completeness of the accounts in the general ledger. However, in addition to business purposes, reconciliation can be used for personal purposes as well.
The explanation of the discrepancy between two financial records or account balances can be accomplished through account reconciliation. Due to the timing of payments and deposits, some differences might be acceptable. However, unexplained or mysterious discrepancies may indicate fraud or bookkeeping irregularities. Records can be reconciled daily, monthly, or yearly for both businesses and individuals.
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