Finding Text
Criteria: An organization’s financial statements should be fairly stated in all material respects. Condition: The Organization’s initial financial statements had various material errors. Cause: The Organization did not allocate adequate resources of qualified accounting personnel to the task of maintaining the accounting records of the Organization. Effect: The auditors identified material misstatements in the initial financial records, which necessitated adjusting journal entries to ensure the accuracy of the financial statements. Recommendation: Additional resources should be allocated to accounting so that the financial statements are materially correct and help ensure financial accuracy. These steps should include but not be limited to hiring staff or engaging independent accountants with sufficient financial expertise to maintain financial records, and also ensure monthly statements of loan activity are received from South State Bank to ensure proper reporting of principal and interest paid on the Organization’s outstanding loan.