Accession Number : ADA580059


Title :   The Audit Opinion of the DISA FY 2011 Working Capital Fund Financial Statements Was Not Adequately Supported


Descriptive Note : Audit rept.


Corporate Author : OFFICE OF THE INSPECTOR GENERAL (DEPARTMENT OF DEFENSE) ALEXANDRIA VA


Personal Author(s) : Vasquez, Richard B


Full Text : https://apps.dtic.mil/dtic/tr/fulltext/u2/a580059.pdf


Report Date : 26 Apr 2013


Pagination or Media Count : 71


Abstract : We determined the adequacy of Acuity Consulting's (Acuity) auditing procedures for the Defense Information Systems Agency (DISA) FY 2011 Working Capital Fund (WCF) Financial Statements. We also determined whether the contract oversight was sufficient. Acuity's auditing procedures on the DISA FY 2011 WCF Financial Statements were inadequate. Specifically, Acuity did not properly test the DISA Fund Balance with Treasury (FBWT) reconciliations; determine whether the undistributed accounts were free of material misstatements; adequately assess whether the deficiencies identified by DISA in its FBWT memorandums for record would have a material impact on the financial statements and Acuity's opinion; perform adequate testing on Property, Plant, and Equipment; and state in its auditor's report that the DISA financial statement disclosures were inadequate. This occurred because Acuity did not perform the audit in accordance with GAGAS, the FAM, and the AICPA standards. In addition, the contract oversight was not sufficient because the Director, Procurement and Logistics Directorate (PLD) prohibited the contracting officer's representative (COR) from completing key duties required to provide oversight of Acuity's work. As a result, Acuity did not have sufficient evidence to issue an unqualified opinion on DISA's FY 2011 WCF Financial Statements. Furthermore, the DoD does not have assurance that the DISA FY 2011 WCF Financial Statements are free of material misstatements. The Director, DISA should review the actions of the Director, PLD; ensure that individuals performing contract oversight of financial statement audits are qualified DISA employees; and seek a refund from Acuity. The Managing Partner, Acuity should withdraw their opinion and review the planned work on future audits to gather sufficient evidence to support their opinion.


Descriptors :   *AUDITING , *CONSULTING SERVICES , *DEPARTMENT OF DEFENSE , *FINANCIAL MANAGEMENT , *RECORDS MANAGEMENT , *STANDARDS , CONTRACTS , DEFICIENCIES


Subject Categories : Administration and Management
      Economics and Cost Analysis
      Military Forces and Organizations


Distribution Statement : APPROVED FOR PUBLIC RELEASE