Which of the following best describes the matching process in ICMR?

• A. Aligning different currencies for intercompany transactions
• B. Verifying that corresponding entries from each entity agree
• C. Reconciling cash flow discrepancies between subsidiaries
• D. Generating summary reports for management review

Answer: (B)

The matching process in Intercompany Matching and Reconciliation (ICMR) primarily focuses on ensuring that corresponding entries from each involved entity are in agreement. This means verifying that the amounts, transactions, and relevant details that each entity records for an intercompany transaction match accurately. The essence of this process is to identify discrepancies early and resolve them to maintain accurate financial statements and eliminate potential compliance issues.

In intercompany transactions, two or more related entities may record the same transaction independently, and it is crucial for these entries to align to reflect the true financial position of the overall organization. By verifying these corresponding entries, businesses can enhance their financial integrity and ensure reliable data reporting.

This process is foundational to ICMR, as it helps mitigate financial risks associated with intercompany dealings and supports effective financial governance.