At the end of the university fiscal year (June 30), the financial records for the prior twelve-month period must be closed. Following closing, a financial report summarizing the transactions is prepared according to a set of standard accounting rules called "Generally Accepted Accounting Principles." The financial report is a public document audited by external auditors. The document is shared with donors, sponsors, bond rating agencies, bond holders, and anyone else who requests it.
Accuracy of the university's financial report depends on the participation and cooperation of all university financial personnel.
The best way for Cornell units to prepare for year-end closing is to periodically reconcile accounting statements throughout the year. This will provide opportunities to investigate and deal with issues promptly. Ideally, any reconciling items should be cleared within the month following a given statement.
In May and June of each year, a critical review must be done on all accounts in preparation for the year-end closing process. This review should include all balance sheet (asset and liability) accounts and net asset (operating) accounts.
Year-end closing involves two phases: preliminary closing and final closing. A set of accounting statements is available at the end of each phase. The preliminary closing statements should be reviewed and adjustments made in the same manner as described above. The final closing statements are then produced.
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