Finding Text
Financial Statement Finding-Preparation of GAAP Based Financial Statements-Criteria:
Internal controls over financial reporting include those related to the actual preparation and review of the audited financial statements in conformity with generally accepted accounting principles (GAAP).
Condition:
The Organization has limited internal resources to prepare full-disclosure financial statements required by GAAP.
Cause:
Management has elected to have the financial statements and the related notes to the financial statements prepared by the independent auditor as part of the audit.
Effect:
Inadequate controls over financial reporting of the Organization could result in the likelihood that the Organization would not be able to prepare the financial statements and the related notes to the financial statements without the assistance of the auditors.
Recommendation:
For entities of the Organization's size, it generally is not practical to obtain the internal expertise to handle all aspects of the external financial reporting. Management should continually be aware of the financial reporting requirements and should review and approve the completed financial statements.
Views of Responsible Officials and Planned Corrective Actions
The Organization’s management is aware of this significant deficiency and addresses it by obtaining our assistance in the preparation of the Organization’s annual financial statements. Management reviews and approves the completed statements and distributes them to the users.