Finding Text
2024 – 001: Financial Statement Preparation and Audit Adjustments
Type of Finding: Choose from the following:
Significant Deficiency in Internal Control over Financial Reporting
Condition: The board and management share the ultimate responsibility for the School's internal
control system and financial statement reporting. While it is acceptable to outsource various accounting
functions, the responsibility for internal control and financial statement reporting cannot be outsourced.
A significant audit adjustment was proposed and posted through the audit process. The adjustment was
a necessary step in ensuring the financial statements were fairly stated in accordance with accounting
principles generally accepted in the United States of America.
Criteria or specific requirement: In an ideal control setting, the School would have a comprehensive
control procedure to ensure that the financial statements, including disclosures are complete and
accurate. Such review procedures should be performed by an individual possessing a thorough
understanding of applicable accounting principles generally accepted in the United States of America.
Effect: It is possible that a misstatement of the School's financial statements could occur and not be
prevented or detected by the School's internal control.
Cause: The School’s controls were not able to detect the adjustments made as part of the audit. The
School does not have a comprehensive review process to ensure that the financial statements,
including disclosures, are complete and accurate.
Repeat Finding: No.
Recommendation: We recommend the board and management work with their bookkeeping company
to develop a process to review and identify such items in a timely manner.
Views of responsible officials and planned corrective actions: There is no disagreement with the
audit finding.