How do you do a three way reconciliation? We are being audited and our account is asking for this

I think they need to tell you what three items they want reconciled.  I can think of a few but would be unique to your company.  For example, I do accounting consulting so I access clients books so in addition to reconciling my own AR to my bank account, I can reconcile to their AP of my AR as well.  Are you sure they did not say they want reconciliation to a 3rd party, like a bank or CC statement?

QB is not the best for completing the Three Way Reconciliation Report.  Unless the development team at Intuit made improvements to change that.  But, you can do the standard reconciliation report in QB and than completing the third part manually.  At the moment, that is the best I can offer you.