Finding Text
Criteria – Management is responsible for establishing and maintaining effective internal control over financial reporting. Condition – The City of Stover, Missouri’s financial statements required adjusting journal entries for financial statement presentation in accordance with the modified cash basis of accounting. The areas in which adjustments were proposed, including those which management recorded, include fixed assets and debt. Effect – Inaccurate financial statements. Cause – The above adjustments were made as part of the audit process. Recommendation – Management should modify year-end closing procedures to ensure that the controls in place are sufficient to assure all accounts are presented in accordance with the modified cash basis of accounting. Management response – The city agrees with this finding and continue to work on improving controls.