How should a Treasurer respond to a financial discrepancy found during reconciliation?

• A. Document the discrepancy, determine cause, correct the errors, notify governance, and strengthen controls if needed
• B. Ignore minor discrepancies to save time
• C. Document the discrepancy, halt payments, and escalate
• D. Post to social media

Answer: (C)

When a mismatch shows up in reconciliation, the right move is to handle it in a disciplined, transparent way that preserves accuracy and strengthens controls. Start by documenting the discrepancy in detail—date, accounts involved, amount, and any supporting documents. Then investigate to determine what caused it, tracing the transaction trail through source documents, bank statements, ledger entries, and cut-off timing. If you identify an error, correct the records so balances reflect what actually happened. It’s important to brief governance or the board on the discrepancy to maintain oversight and accountability. Finally, review and adjust internal controls to prevent recurrence, such as reinforcing segregation of duties, tightening reconciliation steps, and implementing clearer approval processes.

This approach keeps financial reporting reliable and protects the organization from repeated issues. Ignoring minor discrepancies, halting payments without a justified reason, or sharing the situation publicly would undermine accuracy, disrupt operations, or breach confidentiality, respectively.