Finding Text
Condition: Management did not record utility accruals in the accounting records in the amount of $12K.
Criteria: The accrual accounting method ensures transactions are recognized in the accounting period
incurred, rather than paid, which follows the matching principle.
Cause: The cause is undeterminable.
Effect: Not recording accruals could have a material impact on both the balance sheet and the income
statements.
Recommendation: I recommend management post all accruals to properly reflect the financial position of
the Project.