Canada Understanding Year end Audit.

[tallyman]

I am reviewing the Auditors report for last year in prep for starting the new year.
I am part time so I was not around all the time when the Auditor had meetings
with the management.

I am trying to prepare a set of JE to get the accounting system and the bank account to
match up. It did before the processing a handful of checks that I knew were last years expense but would be cashed in the new year.

By some criteria unknown to me the Auditor reversed some to put them back into accounts payable but not others. What are common reasons for this choice? I did notice that
the split was by date. Around the 15th of the first month of the fiscal year.

Of the ones put back into AP part were put into AP and part into an account named
AP Year End. What is the purpose of this account and do I have to do anything with this at the beginning of the next year.?

I currently intend to to the reversals on the dates the the checks actually cleared in the bank because it mean I see a running cash balance that matches the bank statement.
I am using it a verification that my JEs are right. I don't know if that is a good or "best"
practices.

Comments welcome.

 

[CPAInsider]

It sounds like these reversals were as a result of accruing for expenses at year-end. Did the initial JE's are year-end DR and expense account and CR the A/P balance?