Finding Text
2022-002: Accounting software system (previously reported as 2021-002) Condition Beacon, Inc. utilizes QuickBooks as its accounting system. This system has significant advantages, including cost and ease of use; it also has certain weaknesses, including the possibility that records could be altered without timely detection by management. Criteria An effective system of internal control includes permanency in accounting records that precludes the possibility of changes to previously recorded transactions except where approved and subject to oversight. Cause Beacon, Inc. selected this accounting package because of its reasonable cost and ease of use. Effect Errors or unauthorized changes could occur without timely detection by management. Recommendation Management should consider implementing oversight where it is possible and practical to do so to reduce potential for error or unauthorized changes. Views of Responsible Officials and Planned Corrective Actions Management concurs with the reported finding. Beacon, Inc. utilizes QuickBooks as its accounting system because of its ease of use and its capability to fulfill the needs of the organization. A more robust system is cost-prohibitive for a small organization. In order to ensure that management is made aware of any unauthorized changes in a timely manner, Beacon, Inc. shall implement procedures within its monthly reconciliation and closing process to review cumulative financial balances and audit trail reports for any changes made to previously reported totals. Beacon, Inc. will also close each accounting year within QuickBooks after the annual audit so that changes to prior year audited financial information are unable to be made without management approval.