Finding Text
Failure to Reconcile Bank Accounts - Condition: During the course of the audit, we noted that the bank accounts are not reconciled at year-end to ensure proper cutoff and reporting of cash balances at December 31. Criteria: Regular reconciliation of bank accounts is a critical internal control that ensures the accuracy of financial records. Effect: Without timely reconciliations, the following could occur:
a. The Organization risks misstating tis financial position, which may lead to incorrect decision-making by management. b. Unreconciled transactions may conceal unauthorized or fraudulent activity, increasing the risk of financial lossc. c. Unresolved discrepancies can lead to operational inefficiencies, including delays in financial reporting and additional time spent investigating historical transactions. d. Failure to maintain accurate financial records may result in non-compliance with regulatory requirements Recommendations: The Organization should ensure bank reconciliations are performed in alignment with the financial reporting period. Corrective Action: The Organization is working with their financial institution to see if statement closing dates can better align with the reporting period. The Organization will perform the reconciliation if no changes can be made with the bank.