In a recent report, the Government Accountability Office said that it still has concerns about restatements to federal agencies’ previously issued financial statements. According to the document, during the 2005 fiscal year, at least seven of the 24 agencies governed by the Chief Financial Officers Act had restated their previous year’s financial statements. When the GAO went to look at the agencies’ financial statements for 2003, the office found that nine of the 11 agencies that issues restatements in 2003 had received unqualified opinions and then did not consistently communicate those restatements. The GAO has made 11 recommendations to the Office of Management and Budget aimed at further improving the restatement guidance available to agencies’ management and auditors. Since then, the OMB has said it will take the recommendations under advisement. Among the issues highlighted by the GAO were:
- Columns of the agencies’ restated financial statements were not labeled as, “Restated;”
- The agencies’ restatement footnote disclosures lacked clarity or sufficient detail;
- Audit reports did not disclose that the respective agencies had restated certain of their fiscal year 2003 financial statements;
- Audit reports did not provide a statement that the previously issued audit report was withdrawn and replaced by the opinion on the restated financial statements; and,
- Material misstatements and potential material misstatements were not timely communicated by agencies to a variety of parties.
