Finding Text
2022 ? 002: Segregation of Duties Type of Finding: ? Significant Deficiency in Internal Control over Financial Reporting Condition: The organization does not have appropriate segregation of duties and review procedures in place to provide reasonable assurance that financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP); therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the organization?s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Effect: The lack of controls and review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: While performing audit procedures, it was noted that due to staffing turnover and changes, management does not have appropriate segregation of duties and review procedures in place as the President/CEO is completing and overseeing a significant amount of the financial reporting function during a portion of the year. Repeat Finding: Yes ? 2021-002. Recommendation: The organization should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including the number of internal staff), to determine whether additional controls over the financial reporting function can be implemented to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: Management will continue to rely on a third party service provider to assist with the financial reporting function and will review, approve, and accept responsibility for the work performed by the third party servicer.