reinvested dividends on cash flow question

Working on a client cash flow for an audit and trying to get all the needed info on the cash flow (investment section). The brokerage statement is grouping reinvested income dividend into the purchases section, causing a large difference from the sale of proceeds section of the EFTs.

Does anyone know the accurate way to report this movement

I need to have a line item in the Investment section for purchases of securities and sale of securities. If there is a difference, where does the offset go on the cash flow. I am guessing in the operating section as a change in the investment?. I am confused because that income is already accounted for.

I'm not sure what "the sale of proceeds section of the EFTs" is about, and otherwise not crystal clear on the question.

"If there is a difference, where does the offset go on the cash flow. "

My understanding is that dividends received and re-invested are not considered part of net cash provided by operating activities, so they would be an adjustment to reconcile net income to net cash provided by operations.

In the investing activity section of the cash flow statement, the re-invested dividends won't show up at all, since they are not a source of cash (per previous paragraph), nor are they a use of cash for investment.

if it helps, the Exchange traded funds have sales and purchases from exchanges all year long, but they never leave the overall investment. For the audit I was told I have to show all of those ins and out's ( in the investment section) even though they didnt leave the investment.

We've always had a adjustment to reconcile net income to cash ( operations) for the realized/unrealized gains/losses but that was the only reconciling item.

Information from PPC "Guide to Preparing Financial Statements":

Interest and dividend income are considered to be operating activities.

Reinvested dividends should be shown as a cash transaction as an investing activity. PPC mentions that the substance of the transaction is that cash proceeds have been used to increase an investment. PPC indicates this is more appropriate than showing as a noncash activity.

PPC also indicates that if showing as a noncash activity, interest and dividend income would be subtracted from net income arriving at cash flows from operations and the reinvestment would be separately reported as a noncash investing and financing activity.