Finding Text
Condition: During our audit, we noted that the Organization did not account for transactions with various joint ventures in accordance with the agreements.Criteria: Management and those charged with governance are responsible for the design,implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Cause: Although the "development team" were monitoring the progress of the joint ventures to ensure the agreements were being followed, in isolated cases, the ?financial reporting team" did not follow the agreements/contracts to ensure the appropriate revenue recognition and investment accounting. Effect: As a result, revenues were over and understated and investments were misclassified as a result of not accounting for transactions in accordance with certain joint venture agreements and contracts. Recommendation: We recommend the Organization review the financial reporting responsibilities and make the necessary changes to improve the development accounting procedures and controls.