What are Close Review Best Practices?
Definition
Close Review Best Practices are the recommended finance methods for reviewing account balances, journal entries, reconciliations, variance explanations, controls, and reporting packs before the financial close is finalized. They help controllers confirm that results are complete, accurate, supported, approved, and ready for internal or external reporting.
How They Work
Close review starts after preparers complete key close activities such as journal posting, account reconciliation, subledger validation, and variance analysis. Reviewers then check whether balances are reasonable, evidence is complete, approvals are documented, and exceptions are resolved or clearly explained.
A strong review structure is usually aligned with the Close Calendar (Group View) so reviewers know which tasks must be reviewed by entity, account, due date, and reporting milestone.
Core Best Practices
Prioritize material accounts, high-risk balances, and judgment-heavy estimates.
Require clear evidence for reconciliations, journals, accruals, and adjustments.
Use reviewer comments to document questions, conclusions, and follow-up actions.
Separate preparation and review duties through Segregation of Duties (Close).
Track open items, rejected submissions, and reopened close tasks.
Review Areas That Matter Most
Close reviewers should focus on areas that can materially affect financial reporting. These include cash, revenue, inventory, accruals, intercompany, debt, tax, leases, provisions, equity, and unusual manual journals. Analytical Review (Journal Entries) is especially important when entries are large, late, recurring, or posted outside normal patterns.
Reviewers should also connect close results to Cash Flow Statement Review so movements in operating cash, investing cash, and financing cash are consistent with the balance sheet and income statement.
Key Metrics
Useful metrics include review completion rate, overdue review count, reopened item count, rejected submission rate, late journal count, unresolved exception value, and average review turnaround time. These metrics help finance leaders evaluate close quality and reporting readiness.
For example, if 750 close review tasks are assigned and 705 are completed before the reporting deadline, the review completion rate is 94%. If the remaining 45 include revenue, cash, or tax balances, controllers may prioritize them before final close sign-off.
Business Use Cases
Close Review Best Practices support monthly reporting, quarterly reporting, board packs, audit preparation, and management performance discussions. They also strengthen Close Performance Review by showing whether close activities are timely, accurate, and supported by evidence.
Close review findings may also feed into Monthly Business Review (MBR) and Quarterly Business Review (QBR) discussions when variances affect profitability, cash flow, working capital, or business performance.
Control and Audit Readiness
Good close review practices support Close External Audit Readiness by ensuring that schedules, reconciliations, journal support, approvals, and variance explanations are complete before auditors request evidence. They also help confirm that financial reporting controls operated as intended.
For companies with compliance-sensitive operations, review procedures may include Foreign Corrupt Practices Act (FCPA) Compliance checks when payments, gifts, commissions, or third-party expenses require additional documentation.
Improvement Levers
Finance teams can improve close reviews by standardizing templates, defining review thresholds, using consistent variance explanations, and tracking recurring issues. Working Capital Performance Review can also reveal whether receivables, payables, inventory, and cash movements are being reviewed with enough operational context.
Where external stakeholders are involved, review outputs may support Credit Rating Agency Review by providing clear explanations of liquidity, debt, cash generation, and financial performance trends.
Summary
Close Review Best Practices help finance teams review close results with discipline, evidence, accountability, and business context. They improve financial reporting quality, cash flow visibility, audit readiness, operational efficiency, and confidence in final reported results.
