Core Issue: Management backdated checks from July 2023 to June 2023 to manipulate expense reporting.
Impacted Requirements: This practice violates accounting principles by misrepresenting financial periods.
Recommended Follow-Up: Review and reinforce policies on expense recognition and ensure compliance with accounting standards.
Finding Text
During the course of the audit, it was determined that Management backdated checks cut in July 2023 to June 2023 to record the related expense in FY 2023 instead of FY 2024, rather than recording the expense as payable at year-end.
Corrective Action Plan
Expenses not paid by year-end, but related to the current fiscal year, will be recorded in payables rather than backdating checks cut after year-end, to reflect expense in the correct period.