UNITED STATES INTERNATIONAL TRADE COMMISSION
 

WASHINGTON, DC 20436

February 11, 2014

System Review Report

To: Lynne A. McFarland, Inspector General,

Federal Election Commission

We have reviewed the system of quality control for the audit organization of FEC OIG in effect

for the year ended September 30, 2013. A system of quality control encompasses FEC OIG’s

organizational structure and the policies adopted and procedures established to provide it with

reasonable assurance of conforming with Government Auditing Standards. The elements of

quality control are described in Government Auditing Standards. FEC OIG is responsible for

designing a system of quality control and complying with it to provide FEC OIG with reasonable

assurance of performing and reporting in conformity with applicable professional standards in

all material respects. Our responsibility is to express an opinion on the design of the system of

quality control and FEC OIG’s compliance therewith based on our review.

Our review was conducted in accordance with Government Auditing Standards and guidelines

established by the Council of the Inspectors General on Integrity and Efficiency (CIGIE). During

our review, we interviewed FEC OIG personnel and obtained an understanding of the nature of

the FEC OIG audit organization, and the design of the FEC OIG’s system of quality control

sufficient to assess the risks implicit in its audit function. Based on our assessments, we

selected engagements and administrative files to test for conformity with professional

standards and compliance with the FEC OIG’s system of quality control. The engagements

selected represented a reasonable cross‐section of the FEC OIG’s audit organization, with

emphasis on higher‐risk engagements. Prior to concluding the review, we reassessed the

adequacy of the scope of the peer review procedures and met with FEC OIG management to
                             

         

                             

                             

                         

                           

                             

                     

                           

                         

                                   

                             

                       

                                 

       

                                   

                             

                         

                         

                                 

                         

                   

                         

                         

                               

                         

                             

                     

                                 

           

     

     

discuss the results of our review. We believe that the procedures we performed provide a

reasonable basis for our opinion.

In performing our review, we obtained an understanding of the system of quality control for

the FEC OIG’s audit organization. In addition, we tested compliance with the FEC OIG’s quality

control policies and procedures to the extent we considered appropriate. These tests covered

the application of the FEC OIG’s policies and procedures on selected engagements. Our review

was based on selected tests; therefore, it would not necessarily detect all weaknesses in the

system of quality control or all instances of noncompliance with it.

There are inherent limitations in the effectiveness of any system of quality control, and

therefore noncompliance with the system of quality control may occur and not be detected.

Projection of any evaluation of a system of quality control to future periods is subject to the risk

that the system of quality control may become inadequate because of changes in conditions, or

because the degree of compliance with the policies or procedures may deteriorate.

Enclosure 1 to this report identifies the office of the FEC OIG that we visited and the

engagements that we reviewed.

In our opinion, the system of quality control for the audit organization of FEC OIG in effect for

the year ended September 30, 2013, has been suitably designed and complied with to provide

FEC OIG with reasonable assurance of performing and reporting in conformity with applicable

professional standards in all material respects. Federal audit organizations can receive a rating

of pass, pass with deficiencies, or fail. FEC OIG has received a peer review rating of pass.

In addition to reviewing its system of quality control to ensure adherence with Government

Auditing Standards, we applied certain limited procedures in accordance with guidance

established by the CIGIE related to FEC OIG’s monitoring of engagements performed by

Independent Public Accountants (IPA) under contract where the IPA served as the principal

auditor. It should be noted that monitoring of engagements performed by IPAs is not an audit

and therefore is not subject to the requirements of Government Auditing Standards. The

purpose of our limited procedures was to determine whether FEC OIG had controls to ensure

IPAs performed contracted work in accordance with professional standards. However, our

objective was not to express an opinion and accordingly, we do not express an opinion, on FEC

OIG’s monitoring of work performed by IPAs.

Philip M. Heneghan

Inspector General, USITC
		

  

   

                       

         

Enclosure 1:

Office Locations:

999 E Street, NW 

Washington, DC 20463 

Engagements Reviewed:

Audit of the Federal Election Commission’s Office of Human Resources, July, 2013

IPA Oversight, FY2013 Financial Audit