Financial AuditReview of the Audit of SEMATECH's Financial Statements for 1994 Gao ID: AIMD-95-168 August 8, 1995
In the view of Price Waterhouse, SEMATECH's 1994 financial statement were fairly presented in all material respects and there were no material internal control weaknesses or noncompliance with law and regulations. Price Waterhouse did recommend that SEMATECH improve documentation over off-site assets. GAO found no indications during its reviews that the opinion of Price Waterhouse could not be relied upon. However, GAO did note the need for enhanced disclosure in the financial statements with respect to government agency funding, member company funding, and investments. GAO believes that SEMATECH should have disclosed in a July 1994 public announcement, its intent not to seek government funding after December 31, 1996, and the effect that this major funding reduction would have on its operations and financial condition. Also, more details should have been provided on the effect that advance notices of resignation by several consortium members may have on member company funding. Finally, further details should have been provided on the amounts and composition of funding provided and planned for investments. GAO suggests the Price Waterhouse discuss these matters in its opinion on SEMATECH's 1995 financial statements.
GAO found that: (1) the SEMATECH 1994 financial statements were in conformance with generally accepted accounting principals; (2) there were no material internal control weaknesses or noncompliance with applicable laws and regulations; (3) the auditor issued a management letter containing recommendations on how to improve SEMATECH's management efficiency and enhance its internal control structure; (4) there was no indication that the auditor's opinion on SEMATECH's 1994 financial statements or its report on the internal control structure could not be relied upon; and (5) there was a need for enhanced disclosure in the financial statements with respect to government agency funding, member company funding, and investments.