Equity Reconciliation Workbench
An interactive toolkit for the detection, investigation, and correction of discrepancies in the Statement of Changes in Equity.
Establishing the Audit Trail
The integrity of the SOCE rests on the quality of its supporting evidence. This tool maps each equity component to its required source documentation, providing a clear roadmap for vouching and tracing transactions.
Equity Source Document Mapper
Select an equity component to see the primary and supporting documents needed for a robust reconciliation.
Forensic Investigation Techniques
When red flags emerge, shift from standard auditing to forensic investigation. Use these tools to visualize complex data and uncover anomalies that may signal error or fraud.
Stock Option Backdating Visualizer
This chart demonstrates how backdating manipulates option grant timing. A "Normal Grant" occurs at the current price, while a "Backdated Grant" is retroactively timed to a past low point, making it instantly profitable. This visual pattern is a key indicator of fraud.
Error Correction & Restatement
After identifying a discrepancy, the final step is to classify the error and prepare a documented adjusting journal entry (AJE) to correct the records and restore financial statement integrity.
Error Classifier
Select the type of error discovered to understand its nature and impact across the financial statements.
AJE Builder
See a practical example of the correcting journal entry for the selected error type.
| Account | Debit | Credit |
|---|---|---|
| Select an error type to see the correcting entry. | ||
Proactive Governance & Best Practices
Mature financial organizations focus on proactive governance to prevent discrepancies. Explore the COSO framework for internal controls and compare modern equity management software.
The COSO framework provides the globally recognized standard for designing and evaluating internal controls over equity. It consists of five interconnected components:
- Control Environment: The "tone at the top," establishing a culture of integrity and ethical values.
- Risk Assessment: Proactively identifying and analyzing risks specific to equity management, such as valuation errors or fraud.
- Control Activities: Specific policies and procedures like authorization, segregation of duties, and record-keeping to mitigate identified risks.
- Information & Communication: Ensuring quality information is captured and communicated effectively, from board minutes to financial disclosures.
- Monitoring Activities: Ongoing evaluations, often by internal audit, to ensure controls are present and functioning effectively.
Modern equity management platforms are a powerful internal control, automating complex calculations and creating a single source of truth for your cap table. Here's a comparison of leading platforms:
| Feature | Carta | Pulley | Shareworks |
|---|---|---|---|
| Target Market | Startups to Public | Early/Growth Stage | Large/Global Public |
| Key Strength | Comprehensive suite, strong VC network | Real-time modeling, clean UI | Enterprise-grade security |
| Internal Control Aspect | Single source of truth, clear audit trail | Proactive risk assessment of dilution | Robust controls for public companies |
