Finding Text
Material adjustmentsCriteria: Management is responsible for reconciling the accounts at the end of the year.Condition: Insufficient internal controls over financial reporting. Material audit adjustments were required to prevent the entity?s financial statements from being materially misstated.Cause: The entity relied on auditors to propose entries after audit procedures.Effect: Some audit adjustments were due to personnel inexperience with the entity?s general ledger system.Recommendation: The entity needs to improve internal controls to prevent these kinds of adjustments. The entity should document which accounting procedures are needed to be completed on a recurring basis to detect material adjustments. The auditor will work with the entity to make personnel more knowledgeable about its responsibility for the financial statements. The auditor also noted recommends the entity aquire additional training on the entity?s general ledger system.