Financial Audit

The Internal Revenue Service (IRS), the federal government's largest revenue collector, with tax collections of $1.1 trillion for fiscal year 1992, has historically filed unaudited financial information with the Treasury Department. This year, however, IRS prepared for the first time a comprehensive set of principal financial statements. After auditing IRS' principal financial statements for fiscal year 1992, GAO cannot express an opinion on their reliability because critical supporting information was unavailable and information that was available was generally unreliable. In addition, IRS' internal controls did not effectively safeguard assets, provide a reasonable basis for determining material compliance with laws and regulations, or eliminate material misstatements from the principal financial statements.

GAO found that: (1) critical supporting information for IRS financial statements was not available; (2) the available information was generally unreliable; (3) IRS internal controls did not effectively safeguard assets, provide a reasonable basis for determining material compliance with laws and regulations, or ensure that there were no material misstatements in the financial statements; and (4) there were no instances of material noncompliance with laws and regulations during FY 1992.