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Auditors ask for the same five bank reconciliation items every year, but many tools cannot export them together, so teams rebuild evidence by hand in follow-up emails.
Map each auditor request to a specific software export, and test in the demo that one pack per account and month answers every request without extra work.
Export pack per account and month: source file name and row count, opening and closing tie-out, match basis per line, override log with user and time, open items with age and reason, preparer and reviewer sign-off.
An audit-ready pack per bank account that answers the auditor's standard questions without a follow-up request.
For each bank account, a statutory auditor asks for five things: the statement tied to the bank confirmation, the reconciliation as at period end, the ageing of reconciling items, proof that those items cleared later, and preparer and reviewer sign-off. Reconciliation software is worth buying for audit purposes only if it exports all five as one pack per account and month.
What CARO requires is set out in the CARO 2020 bank reconciliation guide, and what a trail should contain is in the audit trail guide. This page maps those requirements to exports.
What does the request list contain?
- Balance tie-out: the closing balance per books, per statement and per bank confirmation agree, or the difference is fully explained.
- Reconciliation at period end: dated 31 March, not the date it was prepared.
- Reconciling items with dates: outstanding cheques, uncleared deposits, bank charges not booked, each with its original date and age.
- Later clearance: evidence from the April statement that items open at 31 March cleared, and an explanation for those that did not.
- Sign-off: who prepared and who reviewed, with dates.
What should the export show?
- The source file name and row count for each statement loaded.
- Opening and closing balance tie-out for each file.
- The reference or rule behind each match, such as a UTR, cheque number or a configured rule.
- Each manual override with the user, date and time.
- Each unmatched item with its reason and age in days.
The proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, in force from 1 April 2023, requires accounting software to log every change with its date, and Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 asks the auditor to report whether that audit trail operated through the year. A reconciliation tool may not be your books of account, but auditors now expect the same standard of edit log for overrides. If you are also under tax audit under Section 44AB of the Income-tax Act, the same pack saves a second round of requests.
How does each request map to an export?
| Audit request | Software export that answers it | Owner | Retention period | Stays outside the tool |
|---|---|---|---|---|
| Balance tie-out | Tie-out summary per account | Preparer | 8 financial years | Bank confirmation letter |
| Reconciliation at period end | Reconciliation dated at period end | Preparer | 8 financial years | None |
| Reconciling items and ageing | Open items list with age and reason | Preparer | 8 financial years | None |
| Later clearance | Next-month match log for those items | Reviewer | 8 financial years | None |
| Overrides and edits | Override log with user and time | Reviewer | 8 financial years | None |
| Sign-off | Approval record | Finance controller | 8 financial years | Board minutes on bank accounts |
The eight-year retention follows Section 128(5) of the Companies Act, 2013.
What does a worked audit pack answer?
Take one month and three accounts: a current account, a cash credit account and a collections account. The pack for each holds the tie-out summary, the open items list and the override log. For the current account, an illustrative tie-out might read: balance per books ₹48,62,400, balance per bank ₹49,10,900, difference ₹48,500, explained by cheques issued but not presented of ₹62,300 less a deposit not yet credited of ₹13,800. An auditor reading it should be able to answer three questions without writing back to you:
- Does the closing balance agree with the bank confirmation, and if not, what explains the difference?
- Which items were open at period end, how old were they, and did they clear in the next month?
- Who changed or forced any match, and who approved it?
If the auditor still has to email about any of these, the export is incomplete. Use the statutory audit reconciliation checklist to cover the other ledgers in the same way.
What should you ask in the demo?
Ask the vendor to export a full pack for one of your accounts from your test pack. Open it in front of them. Check that overrides cannot be deleted from the log, that a closed month cannot be quietly changed, and that the file opens without the vendor’s software.
How Terra Insight fits
TransactIG delivers bank-to-books reconciliation with an exception queue and audit-ready exports. Ask us to export a real pack from your own files in a representative-sample fit benchmark and give it to your auditor to review. See the bank reconciliation software page.