A three-way trust reconciliation is a process used in accounting to ensure the accuracy and integrity of trust accounts. It involves reconciling three sets of records: the bank statements, the internal accounting records, and the individual client records. By comparing these three sources of information, discrepancies can be identified and resolved, ensuring that the trust account balances are accurate and in compliance with legal and regulatory requirements. This reconciliation method provides an additional layer of transparency and accountability, particularly for law firms, where trust accounts are commonly used to hold client funds.