Top-level reviews. Management should monitor company results and periodically compare actual company performance to (1) planned performance, as shown in budgets, targets, and forecasts (2) prior period performance and (3) competitors performance
Analytical reviews. An analytical review is an examination of the relationships between different sets of data. For example, as credit sales increase, so should accounts receivable. In addition, there are relationships between sales and accounts such as cost of goods sold, inventory, and freight out
Reconciliation of independently maintained records. Records should be reconciled to documents or records with the same balance. For example, a bank reconciliation verifies that company checking account balances agree with bank statement balances. Another example is comparing subsidiary ledger totals with general ledger totals
Comparison of actual quantities with recorded amounts. Significant assets are periodically counted and reconciled to company records. At the end of each clerk’s shift, cash in a cash register drawer should match the amount on the cash register tape. Inventory should be periodically counted and reconciled to inventory records
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