Ebook Estimating the Costs and Benefits of Rendering an Opinion on Internal Control over Financial Reporting
The Department of Homeland Security Financial Accountability Act, P.L. 108-330, directs the CFOC and the PCIE to conduct a joint study, and to report to the Congress and to the Comptroller General of the United States, on the potential costs and benefits of requiring agencies subject to the CFO Act to obtain audit opinions of their internal control over financial reporting. This report contains the results of that joint effort.
Working under the leadership of OMB who chairs both councils, we surveyed the IGs for their estimate of the costs of the incremental audit work and asked the IGs and the CFOs for their input on the challenges and benefits of obtaining an opinion on internal control. In addition, we looked at the experiences of publicly-traded companies which, at this point, have had a year of experience implementing Section 404 of the Sarbanes-Oxley Act. We also considered the environment in which the Federal Government operates which differs considerably from the one in which publicly-traded companies operate. Finally, we considered the anticipated benefits that are expected to be achieved through the revisions to A-123 which become effective in fiscal year 2006.
Contents
Reason for Survey and Recommendations
Executive Summary
Introduction
Where We Are Today
- The Federal Environment
New Efforts to Improve Internal Control
Survey Results
- Estimating the Cost to Render an Opinion on Internal Control
Identifying the Benefits of Rendering an Opinion on Internal
Control
Experiences of Publicly-Traded Companies
- Experience Estimating the Cost
First Year Benefits Realized
Conclusion
Objectives, Scope, and Methodology
Attachment A
Table A: Estimated Audit Costs of Opining on Internal Control over Financial Reporting
Table B: Additional Work Required to Render an Opinion on Internal Control over Financial Reporting
Table C: Disadvantages of Opinion on Internal Control over Financial Reporting
Table D: Benefits of Opining on Internal Control over Financial Reporting
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