SAD? SUD? What?

Well, I just finished up delivering audited financial statements to a client of mine.  When I reminded the Controller that she needed to book the SAD entries in the financial system so that the books matched the printed audited financial statements she asked:

What does SAD stand for?

Hah!  It’s been so long even I had to look it up.  SAD stands for Summary of Adjustment and are a list of the journal entries that your auditors recommend you make to adjust your financial statements to reflect the findings during the audit.  Management then decides if they would like to make the adjustments.  Should you decided to not make some of the adjustments (because they are not material) then these are considered SUD entries, or, Summary of Unadjusted entries.

I always liked the idea that they were “SAD” entries because we were sad that the auditors actually found errors.  Sigh.

Got to love accounting acronyms.