Research Proposal on Why the Cashbook Balance Does not Reconcile with the Bank Statement Balance
Category : Free Sample Research Proposal
Why the Cashbook Balance Does not Reconcile with the Bank Statement Balance
In accounting department, it is plain to know that the responsibilities of the accountants are different among the other members in the organization. They have to create various reports in which their corporate leaders often consulted to formulate reasonable and sound decisions in the business. The most important thing that an accountant should bear in mind is the professionalism and integrity that they have to keep to assure that all the transactions are unbiased and true.
Background and Problem Statement
Monthly reports are included in the tasks of the accountants. Much more, the cashbook balance, bank reconciliation, and income and expenditure statement should be provided according to what is asked to them. The general work in the accounting department is composed only with the transactions appeared based on the event or date. The cash accounting methods are used in the department, and the staff should be fully aware about the existence of a cheque and must be recorded whether income or expenditure to avoid any errors (Lions Clubs International, 2008). Through the ongoing practice of the accountants and performing according to the codes of professional ethics, still there are many problems that arise in the department, like in cashbook and bank reconciliation, that might pose threat in the profession of an accountant.
Research Aim and Objectives
The main aim of the study is to learn the different reason that ends into the reconciliation problem between the banks and the cashbook. To support this aim, the study prepared the three specific objectives that can help the researchers and guide them in discovering the reasons behind this dilemma in the accounting department. First is to understand the important of reconciliation and thus, the effects that it may create in the financial position of the organization. Second is to unfold the situations where the reconciliation problems occur. And third is to recognize the classical solutions of the accountants to minimize the errors in reconciliation.
Bank reconciliation is needed at the end of each month and shows the transactions that appeared within the same month. Reconciliation is not just a representation of figures but a report on how the money performed within that month, and it should be balanced with the money recorded in the department and the money updated in the bank. The early arrangement with the bank can lessen the burden among the accountants or auditors and in return, the bank should provide the bank statement for the accountants. This kind of method shows that the money a corporation held and stocked in bank is balanced according to the outstanding transaction. It should be accurate and true, and thereby recorded (Lions Clubs International, 2008). During the audit, there are instances that bank reconciliations are against cashbook, which might reflect on the high levels of professionalism of the accountant and the entire department. Albeit standards had been prepared to avoid this dilemma still, the holes in the practice might be the foreseeable reason behind the reconciliation problem. The lack of supervision, training in the reconciliation process, guidance, modules, materials, and technologies are the common factors that might lead to the ineffectiveness of the reconciliation process. Reconciliations were not always performed or performed correctly and because of that the operating accounts went back to zero. The general ledger or cashbook might comprised of incorrect process such like the dishonored cheques or stale cheques that were left unadjusted and appeared to be different in the bank reconciliation process (Parliament of Tasmania, 2001). Cashbook balances for various funds might not also reconcile because of the non-preparation action, negligence, ineffective monitoring systems, and/or late up-date on the banks (Constitution of Kenya, 2004).
The applicable method in the study is to use the comparative case study method. This type of method can help the researcher/s understand the complexity of the accounting and its practice in the corporate world. Far from the education, accountancy is not only a profession but a practice which for over the years holds a kind of reputation in various industries. Therefore, through the use of the case studies, the researcher might find valuable solution based on the real-experience of the accountants, particularly in reconciliation process.
Constitution of Kenya, (2004) “Report of the Controller and Auditor General on the Appropriation Accounts, Other Public Accounts and the Accounts of the Funds”, Republic of Kenya for the Year 30 June 2004, Accessed 08 June 2010, from http://www.marsgroupkenya.org/Reports/Government/july_07/Controller_and_Auditor_General_Report_2004.pdf
Lions Clubs International, (2008) “SIMPLE SPREADSHEET ACCOUNTING for LIONS”, LionBooks Bookkeeping Manual, Accessed 08 June 2010, from http://www.lionsclubs.org.au/leadership/DownloadFiles/Lion-Books-User-Manual-Jan2008.pdf
Parliament of Tasmania, (2001) “Bank Account Reconciliations in Government Departments”, Auditor-General Special Report No. 39, Accessed 08 June 2010, from http://www.audit.tas.gov.au/publications/reports/specialreport/pdfs/specialrep39.pdf
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