The auditor “concludes that the financial statements give a true and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.”
Emphasis of matter (EOM)
This is to "highlight a matter affecting the financial statements which is included in a note to the financial statements that more extensively discusses the matter. The addition of such an emphasis of matter paragraph does not affect the auditor's opinion.”
This is expressed when the "auditor concludes that an unqualified opinion cannot be expressed but that the effect of any disagreement with management, or limitation on scope is not so material and pervasive as to require an adverse opinion or a disclaimer of opinion.”
Disclaimer of Opinion*
It is expressed when the "possible effect of a limitation on scope is so material and pervasive that the auditor has not been able to obtain sufficient appropriate audit evidence and accordingly is unable to express an opinion on the financial statements."
It is expressed when the "effect of a disagreement is so material and pervasive to the financial statements that the auditor concludes that a qualification of the report is not adequate to disclose the misleading or incomplete nature of the financial statements.”
* - with or without EOM (Emphasis of Matter)
It has now surfaced, and confirmed by the People's Association (PA) this morning ("PA responds to online reports on its accounts"), that the PA accounts for 2008 through 2011 have been slapped it with an "Adverse Opinion" by auditors, year after unrepentant year. That's auditor lingo saying that PA financial statements do not present the true state of affairs of the Association. Specifically, the financial position of the 1,803 (as at 31 March 2011) grass-roots organisations (GROs) under its purview are not consolidated, and no audited financial information of the entities under its control are available.
Apparently Workers' Party chief Low Thia Khiang did raise a red flag in 2008, but the blinkered eyes of Parliament decided it "was fully responded to." Nevertheless, their spokesman is now responding with a confessional, "PA is on track to present fully consolidated accounts for FY2013." Does that mean senior anti-graft officer Edwin Yeo does not have to go to jail for 10 years if he makes amends and undertakes to stop pilfering from the Corrupt Practices Investigations Bureau?
We are not dealing with peanuts here (unit of currency defined as $600,000 by Mrs Goh Chok Tong), PA’s operating expenditure for FY2012 increased by $46 million to $483 million, of which $434 million have been siphoned off from taxpayers in the guise of Government grants.
The Auditor-General's Office (AGO) has just been ordered to conduct an audit of the opposition-run Aljunied-Hougang-Punggol East Town Council’s (AHPETC) FY2012-13 accounts for a "Disclaimer of Opinion". Did they do that just to distract the AGO and avoid the elephant in the room?