Answer: Management made prior period adjustments to financial statements after they were audited, lacking necessary documentation.
Trend: This practice raises concerns about the reliability of financial reporting and internal controls.
List: Follow up by implementing stronger controls and requiring documentation for any future adjustments.
Finding Text
Prior period adjustments made after issuance of audited financial statements by management without documentation, controls, or explanations. These adjustments affected the beginning balance of net assets for current period.
Corrective Action Plan
A Procedure has been created for the process closing the books after an audit. The bookkeeper will has been trained and a copy of the process can be reviewed during an audit. The procedure is included.