Section 56Sec./Art. 56

Reporting standards. 1. Audit reports shall be dated, signed manually and shall be issued and distributed in the manner provided by regulations of the Commission.

2. Audit reports shall contain basically the transmittal statement, scope and objectives of the audit and time period examined highlights, financial information, findings, recommendations and conclusions as well as other data that may provide the management of the audited agency with the necessary input for the decision-making process. Tables, charts, graphs and other data to detail the conditions and facts shall be used in proper cases.

3. Audit reports shall meet the following reporting criteria:

(a) Factual matter must be accurately, completely and fairly presented.

(b) Findings must be presented objectively and in language as clear and simple as the subject matter permits.

(c) Findings must be adequately supported by evidence in the audit working papers.

(d) Reports must be concise yet complete enough to be readily understood by the users.

(e) Information on underlying causes of problems must be included so as to assist in implementing or devising corrective actions.

4. Audit reports shall:

(a) Put primary emphasis on improvement; critical comments shall be presented in balanced perspective, recognizing unusual difficulties or circumstances faced by officials concerned.

(b) Identify and explain issued and questions needing further study and consideration by the auditor, the agency or others.

(c) Include recognition or noteworthy accomplishments particularly when management improvements in one area or activity may be applied elsewhere.

(d) Include recognition of the views of responsible officials of the agency audited on the auditors findings, conclusions and recommendations. Except where the possibility of fraud or other compelling reason may require different treatment, the auditor's tentative findings and conclusions should be reviewed with officials. When possible, without undue delay, their view should be obtained in writing and objectively considered and presented in the final report.

(e) State whether any significant pertinent information has been omitted because it is deemed confidential. The nature of such information should be described and the law or other basis under which it is withheld should be stated.

5. Audit reports accompanying financial reports shall:

(a) State whether the audit was made in accordance with generally accepted auditing standards, and shall disclose the omission of any auditing procedure generally recognized as normal or deemed necessary by him under the circumstances of a particular case, as well as the reasons for the omission. Nothing in this section, however, shall be construed to imply authority for the omission of any procedure which auditors would ordinarily employ in the course of audit.

(b) Express the auditor's opinion with respect to

i. whether the financial report have been presented fairly in accordance with applicable laws and regulations and the generally accepted accounting principles applied on a consistent basis.

ii. material changes in accounting principles and practices and their effect on the financial reports.

(c) Identity any matter to which he takes exception and shall specifically and clearly state his exceptions together with a statement on the effect thereof, to the extent practicable, on the related financial report.

(d) Contain appropriate supplementary explanatory information about the contents of the financial report as may be necessary for full and informative disclosure about the financial operations of the agency audited.

(e) Explain violations of legal or other regulatory requirements, including instances of non-compliance.

CHAPTER 2

AUDIT OBJECTIVES