Finding 1168765 (2025-001)

Finding 2025-001 Significant Deficiency in Internal Controls Over Journal Entries Description: Detailed review of journal entries. Criteria: All journal entries should be reviewed in detail by an individual with the skills, knowledge, and experience to evaluate the journal entries and their effect on the financial statements.Condition: During the course of the audit, the auditor found that detailed reviews of each journal entry posted to the general ledger are not required as a part of the entity’s internal control. Cause: Management did not have proper controls in place to ensure that detailed reviews of each journal entry posted to the general ledger are performed. Effect: The lack of detailed reviews of each journal entry posted to the general ledger significantly increases the risk that unauthorized or fraudulent journal entries may be posted to the general ledger without detection. Recommendation: We recommend that management implement internal controls such that every journal entry is reviewed in detail by an individual with the skills, knowledge, and experience to evaluate the journal entries and their effect on the financial statements.