Assignment 1: Financial Statement/Audit Report Review
worth 350 points
State of Maryland 2016 CAFR
You will be assigned one (1) state government and review the financial statements and audit report for that entity.
Write a three to five (3-5) page paper in which you:
Review the introductory section of the comprehensive annual financial report (CAFR).
Was the entity’s annual report awarded a “certificate of achievement for excellence in financial reporting?” What is the significance of this award?
What are the key issues addressed in the letter of transmittal?
Review the financial section.
Did the entity receive an “unqualified” audit opinion? If not, why not?
Does the report contain Management’s Discussion and Analysis (MD&A)? If so, what key issues are addressed?
What are the main sources of the entity’s revenues, including those from both the governmental and business-type activities?
Does the report discuss the accounting basis for recognizing revenues?
Does the entity’s government-wide statement of net assets or governmental-fund balance sheet report “deferred revenue?” If so, what is the most likely reason this revenue has been deferred?
What is this entity’s property tax rate?
At what percentage of fair market value is real property assessed?
When are property taxes due? When do interest and penalties begin to accrue?
Did this entity generate revenue from traffic fines? As best you can tell, are these revenues reported in the government-wide statements as program revenues (e.g., associated with police or public safety) or as general revenues?
Does the report include “required supplementary information?” If so, what are the main areas addressed?
Does the report include “combining statements?” If so, what is the nature of these statements?
Does the report include other supplemental information? If so, what types of information are in this section of the report?
Review the statistical section.
What is the population of your entity?
Who is the entity’s major employer
What types of information are included in the statistical section?
State your opinion on the financial condition of this entity. Your opinion should be supported with the results of your analysis.
When answering the questions above, please be specific by citing the page number or numbers from the CAFR!
Your assignment must follow these formatting requirements:
· Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
· Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
Grading for this assignment will be based on answer quality, logic/organization of the paper, and language and writing skills.
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