Finding Text
Lack of Client Expertise in Financial Accounting and Reporting. The organization does not have the ability, either internally or through the use of a qualified outside party, to independently prepare and review the financial statements and the related footnote disclosures. As such, there are no controls to prevent and detect misstatements in this area. These types of items are typical of small entities, where the accounting staff is not large enough to establish sophisticated accounting controls. Newburg Retirement Center, Inc’s internal accounting control is very informal. This can lead to situations where inconsistencies and errors are not detected as part of the regular accounting processes, and require increased work at year-end in the form of additional audit adjusting journal entries.