Finding Text
Criteria or specific requirement: Management is responsible for establishing and maintaining effective internal controls over financial reporting.
Condition: The audit of the financial statements identified adjustments to the current year financial statements that were considered to be material.
Cause: Receivables that were unknown as of the year end date but were relevant to the fiscal year were received after year end. The year end balances were not updated to reflect these new receipts.
Effect: Audit procedures identified improper recording of receivables and related revenues. The financial statements and related notes to the financial statements could be significantly misstated.
Recommendation: We recommend that management review its process for the preparation of financial statements and evaluation of transactions in accordance with generally accepted accounting principles.
Views of responsible officials and planned corrective actions: Management will consider their preparation and review procedures for proper recording of balances going forward.