Auditor-Ready Adjustments — Journals, Controls & Evidence

Let postings explain themselves (cape optional, timestamps required).

The old way of adjustments is improvisation: free-text journals, evidence scattered in inboxes, and approvals that depend on who shouted loudest. The new way makes auditor-ready adjustments boring—in the best sense. You’ll standardise journal types, attach the right proof, and route approvals by materiality so reviewers make decisions, not guesses. In this playbook we’ll map the core journal types, define evidence standards, and show how to build a lightweight workflow that stands up to audit without slowing the close. By the end, postings will travel with their story, auditors will sample faster, and Day 0 will feel like delivery, not archaeology.

Day-in-the-life: adjustments before → after

Before: Day 0. A “misc accrual” lands without a calculation. Someone pastes a screenshot into a slide deck; the email thread has seven people and zero approvals. Audit asks for support; the evidence is… somewhere. Meanwhile the close waits (and so does dinner).

After: Controllers post from standard journal types. Each entry carries context fields (purpose, period, counterparty), required attachments, and a materiality route to the right approver. Exceptions appear in the cockpit; reviewers approve with one click because the story is attached to the numbers. Audit samples the same record and nods. The close moves.

So what? When evidence travels with the journal, questions shrink and cycle time falls.

Journal types & evidence map (table)

So what? Agree the minimum proof once; stop renegotiating it every month (sanity preserved).

Before vs After switches

• From free-text to types: Use a fixed list of journal types with purpose fields.
• From inbox to attachments: Store evidence with the entry, not beside it.
• From guesswork to thresholds: Route by materiality; escalate on ageing.
• From slides to cockpit: Exceptions live in one view with owners and due times.
• From once-off fixes to rules: Turn recurring issues into validations (cry less wolf).

Make these switches and adjustments stop clogging Day 0. So what? Faster reviews, fewer restatements, happier auditors.

Stakeholder talk tracks

CFO: “I want speed without risk.” — Materiality + standard types + evidence on entry. Approvals are quick because context is built-in.

Group Controller: “Please, fewer late surprises.” — Pre-close routines and validations block missing proof. Aged exceptions surface early.

Audit: “Show me the trail.” — Journal history shows who, when, why, and attachments. Sampling becomes confirming, not hunting.

IT/Data: “No bespoke monsters.” — Keep types and thresholds in metadata. Reuse governance masters for accounts, entities, and rates.

FP&A: “Don’t break my comparatives.” — Label recurring topsides; ensure drivers roll into the close cadence and disclosure workflow.

So what? Each team gets what they need: clarity, speed, and fewer emails.

Objections & responses + real-world moments

• Objection: “This adds admin.” — Response: Ten seconds to attach proof saves days in audit queries.
• Objection: “Edge cases won’t fit.” — Response: Keep an “other (with rationale)” type and review usage monthly.
• Objection: “Approvals will slow us.” — Response: Route by threshold; below de minimis auto-approve.
• Objection: “Evidence lives in ERP.” — Response: Link or export; the approver needs it where they approve.

• Late lease accrual: Type = accrual; attach schedule; controller approves in minutes.
• IC fee true-up: Counterparty confirmation attached; both entities approve; disclosure updates.
• FX pack mismatch: Validation stops posting; treasury publishes stamped pack; retry passes.
• Top-side reclass: Policy reference + rationale attached; audit ticks and moves on (everyone exhales).

So what? Common “gotchas” become teachable patterns—and then routine.

Pitfalls → fixes

Pitfall 1: Evidence elsewhere.
Fix: Approvals require attachments or links; no proof, no post.

Pitfall 2: Everything is urgent.
Fix: Materiality by entity/account; escalate only on impact or ageing.

Pitfall 3: Free-text reversals.
Fix: Force reversal flags and dates; auto-reverse where possible.

Pitfall 4: Unmapped topsides.
Fix: Govern a topside range; require mapping to disclosures.

Pitfall 5: Validation noise.
Fix: Tier checks: hard fail (missing evidence), soft warn (minor format). Tune monthly.

So what? Five guardrails remove the classic friction without adding bureaucracy.

30–60–90 plan to operationalise adjustments

Days 0–30 — Stabilise: Approve the journal type list, materiality thresholds, and evidence per type. Add reversal flags/dates. Pilot with two entities and three types (accrual, reclass, IC true-up).

Days 31–60 — Streamline: Embed validations in the upload/posting screens. Route approvals by threshold. Surface aged exceptions in the workflow cockpit. Train reviewers to reject “no proof” entries (polite, firm).

Days 61–90 — Scale: Extend to all entities; add FX revaluation and topside policies. Tie journals to intercompany routines and the disclosure flow so narrative refreshes automatically.

So what? Three sprints move you from ad-hoc to auditable without slowing the close.

Approval matrix (RACI snapshot)

So what? Clear owners mean faster approvals and fewer “who signed this?” moments.

Metric that matters

PBC rework requests on journals (count per close). Pair with median approval time and % journals with required evidence. Healthy processes show shrinking rework, faster approvals, and near-100% evidence coverage. If the KPI stalls, inspect validation rules, materiality thresholds, and whether evidence lives with the entry.

So what? When you measure rework at the source, the audit stops measuring it for you.

Post with proof, approve on impact, and keep Day 0 calm.

Adopt standard journal types, attach evidence by rule, and route approvals by materiality. Pilot for three weeks with two entities, then scale across the group. Tie journals into your workflow cockpit and disclosure routine so adjustments explain themselves—before anyone asks.

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