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:
1. 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
2. Audit could not be completed in time due to financial statement preparation weaknesses.
Large numbers of disbursements without supporting documentation (approximately $275 million)
3. Major problems after implementing a new financial accounting system
Problems with locating supporting contract information
Financial statements were fairly stated after material auditor adjustments.
———
How would you draft the following audit opinion and internal control report:
What conclusions/recommendations would you make as an auditor? In your audit report, what would you say?
The value of materiality is $120 million.
Findings of the Audit:
1. Cash reconciliations were not completed until 5 months after the end of the fiscal year, but they were completed by the end of the year. The unreconciled balances reached $1.4 billion at one point.
Before being sent to the auditors, the financial statements had a few minor discrepancies.
At the end of the year, the financial statements were accurate.
Entity adopted new SFFAS this year that significantly changed the reporting structure
2. Audit could not be completed in time due to financial statement preparation weaknesses.
Large numbers of disbursements without supporting documentation (approximately $275 million)
3. Major problems after implementing a new financial
