Manual Journal Entry Preparation, Approval and Review Controls for UAE Finance Teams

Manual journals are necessary for selected close, allocation and correction activities, but they bypass normal transaction workflows. A controlled process makes the reason, evidence, approval and financial effect visible before and after posting.

Define when a manual journal is permitted

Document acceptable journal types, such as supported accruals, allocations, approved corrections, reclassifications and controlled closing entries. Identify transactions that should instead originate in receivables, payables, payroll, inventory, fixed assets or another subledger. The policy should prohibit using journals to conceal missing source documents or bypass an approval workflow.

Use one standard preparation record

Capture legal entity, period, journal date, purpose, accounts, debit and credit values, currency, cost centre or other required dimensions, source reference, reversal instruction, preparer and approver. Attach the calculation and evidence. Descriptions should explain the economic purpose rather than repeat a generic phrase such as month-end adjustment.

Separate preparation, approval and posting

Where the team size permits, the preparer should not approve the same journal. Posting rights should be limited to named roles, and emergency access should be logged and reviewed. The approver should test the business purpose, calculation, evidence, period, coding and impact rather than approve only because the journal balances.

Control recurring and reversing journals

Maintain a register of recurring journals with owner, frequency, calculation basis, review date and end date. Revalidate the amount and purpose before each posting. For reversing entries, link the reversal to the original journal and expected clearing event. Investigate entries that fail to reverse or remain in the account after the underlying invoice or transaction is recorded.

Reconcile journals to account schedules

Every manual journal should trace to the reconciliation or schedule it changes. Review journals posted directly to cash, revenue, receivables, payables, inventory, tax, equity or other sensitive accounts under the entity's risk rules. Investigate entries that create subledger-to-ledger differences or use suspense and clearing accounts without an owned resolution plan.

Perform post-close analytics

After posting closes, review late entries, round amounts, weekend or unusual-time postings, journals just below approval thresholds, repeated descriptions, dormant accounts, entries prepared and posted by the same user, and journals reversed soon after close. An alert is a prompt for evidence review, not proof of misconduct.

Manual journal control checklist

1. Define permitted journal types and prohibited workarounds. 2. Require purpose, calculation and source evidence. 3. Validate entity, period, accounts and dimensions. 4. Separate preparation, approval and posting where practical. 5. Restrict and review journal-posting access. 6. Control recurring and reversing entries. 7. Reconcile each journal to the affected schedule. 8. Review unusual and late entries after close.

IAS 8 sets requirements for accounting policies, estimates and errors, while the IFRS Conceptual Framework addresses recognition, presentation and useful financial information. The correct correction or accounting treatment for a specific item depends on its facts and the applicable reporting framework. This article addresses finance-process governance.

About the author

Haris Arif is Head of Finance and Investment. He is a finance and investment leader with experience across multi-entity businesses in technology, F&B and hospitality. He writes practical insights on financial control, management reporting, working capital, tax readiness and finance transformation for UAE founders, CFOs, investors and management teams.

Connect with Haris Arif on LinkedIn: https://www.linkedin.com/in/harisarifofficial/