How Would You Write the Audit Opinion and Internal Control Report on the following:
As an auditor, what would your conclusions/recommendations be? What would you state in your audit report?
Materiality is $120 million
Audit Findings:
- Cash reconciliations not performed until 5 months late, but were caught up by year-end. At one point in time, the unreconciled balances totaled $1.4 billion.
Financial statements had some minor differences before being provided to the auditors
Financial statements were fairly stated at year-end
Entity adopted new SFFAS this year that significantly changed the reporting structure - Audit could not be completed in time due to financial statement preparation weaknesses.
Large numbers of disbursements without supporting documentation (approximately $275 million) - Major problems after implementing a new financial accounting system
Problems with locating supporting contract information
Financial statements were fairly stated after material auditor adjustments.