Finding Text
Accuracy of Financial Records - Material Misstatements Criteria: An organization’s financial statements should be fairly stated in all material respects.
Condition: The Organization’s initial financial statements had various material errors.
Cause: The Organization did not allocate adequate resources of qualified accounting personnel to the
task of maintaining the accounting records of the Organization.
Effect: The auditors identified several material misstatements in the initial financial records, which
necessitated multiple adjusting journal entries to ensure the accuracy of the financial statements.
Recommendation: Additional resources should be allocated to accounting so that the financial
statements are materially correct and help ensure financial accuracy. These steps should include but
not be limited to hiring staff or engaging independent accountants with sufficient financial expertise to
maintain financial records, and also ensure monthly statements of loan activity are received from
South State Bank to ensure proper reporting of the loan payable.
Management Response: The Organization will also look into hiring an independent accountant to
assist with financial statement preparations to ensure accuracy. The Organization will also take steps to
ensure the loan liability balance held at South State Bank is reported accurately.