Subj: Terri Giles/ CCHoA Bookkeeping
Date: 1/23/2005 8:04:58 P.M. Central Standard Time
From: LS0909
To: qfennessy@circlecranch.info
CC: info@circlecranch.info, directors@circlecranch.info, committees@circlecranch.info, landscape@circlecranch.info, cdietz@circlecranch.info, mgoehring@circlecranch.info, aemartin@circlecranch.info, escruggs@circlecranch.info, surban@circlecranch.info
Dear Mr. Fennessy:
I am going to respond your whole letter by three e-mails within the next seven to ten days. I am just too busy these couple days to compose a long letter.
In your letter without a date, you said, ?“?…?…..This board has reviewed the audit report submitted by Helin, Donovan, Trubee & Wilkinson, L.L.P. and are not aware of any glaring irregularities. In addition, our vice president, Mary Goehring, has been reviewing and making improvements to our recordkeeping processes but has not identified any glaring irregularities?…?…?….?”
I want to point out one paragraph in CCHoA?’s Year 2000 Auditors?’ Report as follows:
Thomas P. Donovan CPA, PLLC
Our Responsibility under Generally Accepted Auditing Standard
As stated in our engagement letter dated March 23, 2001, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement and are fairly presented in accordance with generally accepted accounting principles. Because an audit is designed to provide reasonable, but not absolute, assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, fraud, or other illegal acts may exist and not be detected by us.
You might also find interesting about the following article.
Forensic Audits Follow Accounting Mess
For every major corporate-audit failure nowadays, there seems to be a follow-up with a ?“forensic audit.?” What exactly does that mean?
The short answer: It?’s the kind of thorough, investigative audit that should have been done in the first place ?– but wasn't.
Forensic audits currently are being conducted at Tyco, Enron, WorldCom and Adelphia in the wake of accounting scandals at the companies.
Here?’s how a forensic-audit scenario typically plays out:
A company releases its audited financial statements, and its independent auditor says the numbers comply with generally accepted accounting principles. Later, the company admits the statements didn't comply with those accounting principles, and that the company wasn't as profitable as it said.
The company?’s stock falls. The Securities and Exchange Commission investigates. Plaintiffs?’ lawyers sue. The company announces its own internal investigation and then brings in its own forensic accountants.
They go digging for accounting misstatements so the company can assess its true financial condition. That means checking ledgers and bank records, interviewing employees and customers, doing background checks on executives and scouring e-mails, among other things. They're also on the lookout for other types of fraud, such as theft of corporate assets.
By that point the plaintiffs?’ lawyers usually already have hired their own forensic accountants. The company?’s forensic accountants often disagree with their counterparts for the plaintiffs?’ lawyers on the degree to which the books were cooked. Usually, they argue the fraud wasn't as widespread as the lawsuits allege.
The forensic auditors wouldn't have been needed if the independent auditors had done a better job. To be sure, big accounting firms say it?’s tough to detect a carefully concealed fraud, though that is a key part of an auditor?’s job. By Jonathan Well
Mr. Fennessy, I will send you next e-mail either on Tuesday or Wednesday regarding Terri Giles?’s charges of bookkeeping services on raw lands/ builders?’ lots.
Sincerely,
Lisa Sun
Circle C Homeowner
