Finding Text
Internal Control Over Financial Reporting
Material Weakness in Internal Control
Condition: During our audit procedures we noted that timely and complete monthly and annual financial account reconciliations did not take place. As a result, we proposed and management recorded journal entries to correct the misstatements that had a material effect on MNM’s accounting records.
Criteria: Preparing reliable financial information is a key responsibility of management. The ability to effectively manage MNM requires access to timely and accurate financial information that informs decision making. Management’s ability to fulfill its financial reporting responsibilities depends in part on the design and effectiveness of the controls and safeguards over financial reporting.
Effect: Errors and/or fraud can occur and not be detected and corrected on a timely basis.
Cause: Lack of management oversight.
Auditor Recommendation: We recommend that procedures and controls are implemented in order to prepare timely and accurate financial information in accordance with generally accepted accounting principles.