General Ledger Journal Entries
A local government employee who makes journal entries on an entity’s accounting system is able to change the entity’s most basic financial records. To prevent abuse, the number of employees allowed to make journal entries should be limited. Public entities should periodically review who can make journal entries and determine if those employees need access to this function.
Entities should also maintain supporting documentation for each journal entry. The supporting documentation should explain who made the journal entry and why.
Journal entries should be reviewed and approved by someone other than the person making the entries. One way to accomplish this approval process is to provide the reviewer with a report of all journal entries made during the prior week or month. When the reviewer understands the journal entries and their purpose, consulting the supporting documentation where necessary, the reviewer should sign the report to show approval of the entries.
Date this Avoiding Pitfall was most recently published: 2/14/2020