Finding Text
2022-001 Internal Controls Criteria: Internal controls should be in place to ensure general ledger balances and external financial reporting conforms to generally accepted accounting principles and the Organization's accounting policies. Condition: Cash, and accounts payable were both overstated by $207,028. Cause: Reconciliation procedures of the financials were not sufficient to identify the differences in a timely manner. Effect: Potential exists for misstatement to the financial statements. Recommendation: It is recommended that management review policies and procedures to ensure that reconciliations of the balances are being performed regularly, in addition to ensuring that all year and closing entries are supported by appropriate documentation. This reconciliation process is a component of internal controls over the accounting process. Auditee Response: Discovered this error internally and promptly notified the auditor. This was a one-time event. The mistake was discovered during an internal review of the financial statements as part of the internal controls before the audit was submitted to governing organizations. Necessary steps have been taken to rectify this oversight.