What is Close Review Process?
Definition
Close Review Process is the structured review of financial close outputs before results are finalized for reporting. It checks whether journals, reconciliations, accruals, subledger balances, entity submissions, and reporting schedules are accurate, complete, approved, and supported by evidence. A strong close review process supports financial reporting quality, operational efficiency, and reliable business performance analysis.
How Close Review Process Works
The close review process begins after preparers complete close activities. Reviewers then validate balances, supporting files, account movements, calculations, and approvals. For example, a controller may review balance sheet reconciliations, late journals, intercompany differences, variance commentary, and consolidation adjustments before final sign-off.
The review should follow a defined timetable and ownership model, especially in a Multi-Entity Close Process where local entity results must be reviewed before group consolidation.
Core Review Areas
Journal review: validation of recurring, manual, adjusting, and consolidation entries.
Reconciliation review: confirmation that balances are supported and reconciling items are explained.
Variance review: analysis of actuals against budget, forecast, and prior periods.
Evidence review: check that schedules, approvals, and backup files are complete.
Final approval: sign-off by controllers, finance managers, or group reporting owners.
Finance Use Cases
Close review process is used in month-end close, quarter-end reporting, year-end close, shared services, and consolidation. It supports Revenue Close Process by reviewing revenue cutoff, billing support, contract schedules, and revenue adjustments. It also supports Expense Close Process through accrual review, prepaid expense checks, reclassifications, and vendor-related analysis.
Asset-heavy organizations use the review to validate Asset Close Process, depreciation entries, asset additions, disposals, and Inventory Close Process balances. Lease-intensive companies apply review steps to Lease Close Process schedules, lease liabilities, right-of-use assets, and amortization entries.
Key Metric and Example
A practical metric is:
Close Review Completion Rate = Close Items Reviewed by Deadline ÷ Total Close Items Due for Review × 100
For example, if 460 close items require review and 437 are reviewed by deadline, the close review completion rate is 437 ÷ 460 × 100 = 95%. If the target is 98%, finance leaders can review delays by entity, reviewer, account type, or close dependency.
Controls and Analysis
A strong close review process improves control quality by separating preparation from review and approval. Analytical Review (Journal Entries) helps identify unusual postings, material adjustments, and unexpected account movements before results are finalized.
It also supports Close Performance Review by showing whether the close was completed on time, which items caused delays, and which review areas require more attention in future cycles.
Automation and Improvement
Close review can be strengthened with Robotic Process Automation (RPA) in Shared Services for recurring status checks, task routing, and evidence collection. Robotic Process Automation (RPA) Integration can help connect ERP data, reconciliations, and close task updates.
Finance teams may also use Business Process Model and Notation (BPMN) to map review steps, approval paths, exceptions, and dependencies. This supports Close Process Optimization by making the review process easier to standardize and improve.
Best Practices
Define review ownership by account, entity, task type, and risk level.
Prioritize material balances, unusual movements, late journals, and estimates.
Separate preparation, review, approval, and final sign-off responsibilities.
Require evidence for reconciliations, judgments, adjustments, and disclosures.
Track recurring review findings after each close cycle.
Summary
Close Review Process ensures that close outputs are validated before financial results are finalized. It connects journals, reconciliations, variance analysis, evidence, approvals, and process improvement. For finance leaders, it improves operational efficiency, financial reporting quality, audit readiness, and business performance confidence.
