Financial Audit: IRS' Fiscal Year 2000 Financial Statements

The Internal Revenue Service's (IRS) fiscal year 2000 financial statements, including the accompanying notes, present fairly, in all material respects, in conformity with U.S. generally accepted accounting principles, IRS' assets, liabilities, net position, net costs, changes in net position, budgetary resources, reconciliation of net costs to budgetary obligations, and custodial activity, for fiscal year 2000. However, misstatements may nevertheless occur in other financial information reported by the IRS as a result of internal control weaknesses. Because of material weaknesses in internal controls, IRS did not maintain effective internal controls over financial reporting or compliance with laws and regulations, and thus did not provide reasonable assurance that losses, misstatements, and noncompliance with laws material in relation to the financial statements would be prevented or detected in an ongoing manner and on a timely basis. GAO's tests of compliance with selected provisions of laws and regulations disclosed two instances of noncompliance with laws and regulations that are reportable under U.S. generally accepted government auditing standards or Office of Management and Budget guidance.