Finding Text
Finding: A material journal entry related to the recording of developer fees revenue was proposed
and posted during the audit process. This adjustment was a necessary step in ensuring that the
financial statements were fairly stated under U.S. Generally Accepted Accounting Principles
(GAAP). Management is responsible for controls over the period-end financial reporting process to
ensure conformity with GAAP. The Organization’s controls were not able to detect and post the
necessary adjustment made as part of the audit causing the financial statements to be materially
misstated.
Recommendation: The Organization should review all developer agreements in detail to ensure that
developer fee revenue is recognized in accordance with the agreement.
Management’s Response: See Corrective Action Plan