Issue: Monthly cash reconciliations were not prepared, risking material misstatements in financial statements.
Trend: Lack of comparison between monthly reconciliations and the general ledger.
Follow-up: Implement a routine for monthly reconciliations to ensure accuracy and identify discrepancies.
Finding Text
ReconciliationsCondition and Criteria: The entity did not prepare monthly cash reconciliations.Effect: The entity?s financial statements could be materially misstated.Cause: Monthly reconciliations were not being compared to the general ledger.Recommendation: Monthly reconciliations of bank statements to the general ledger must be performed to keep the two in balance and identify the reasons for any differences. We recommend that these reconciliations become a monthly routine.
Corrective Action Plan
In August 2021, the accounting staff started reconciling the past and current bank statements to bring them to an appropriate level of oversight. All bank accounts are currently being reconciled and reviewed on a monthly basis.