Week 4 Assignment 2 - Financial Reporting Review of Local Government

 Requirement

What Requirement is Asking ----

Compare and contrast the Comprehensive Annual Financial Report (CAFR) of the selected local government entity with the government entity identified in the Week 1 homework. In your comparison, include publication method of the CAFR.

This requires a comparison of the Town of Cary, NC with the Town of

Winston-Salem, NC in terms of the publication method/methods (that

is, how is it published) used for the 2019 CAFR (Comprehensive Annual

Financial Report) for each town.

· What is the method/methods used?

· Are they the same for both or how are they different?

Include in your comparison audit and budget information in the CAFR.

This question is asking for the audit and budget information for the town of Winston-Salem, NC compared to Cary, NC. Examples –

· How do the budgets compare?

· What type of budgets? Object, performance, etc?

· How do their budget variances compare?

· Were they both audited by public accounting firms?

Include in your comparison the type of audit report issued.

This question is asking what type of audit report was issued for Winston-Salem, NC and what type of audit report was issued for Cary, NC. Recall from your auditing class, there are four types of audit opinions – unqualified (clean report), qualified (qualified report), disclaimer (disclaimer report), and adverse (adverse report).

Include in your comparison the existence or nonexistence of an internal function within the government entity.

This question is asking if the town of Winston-Salem, NC has an internal audit function and if the town of Cary, NC has an internal audit function. Note: an internal audit function is not the same as internal controls. If the CAFR does not say, check the town’s website.

Prepare the analysis for the selected local government entity, including information on the introduction, financial section, and statistical section prepared in the CAFR from Chapter 2.

This question is asking you to answer all the questions for the Chapter 2 Continuing problem for the town of Winston-Salem, NC. These questions are found on pages 82-83 of the textbook.

Analyze the methods used by the selected local government entity in comparing the budget-to-actual reports. Include an evaluation of the basis of accounting used for the budget and financial statements.

This question has two parts. First you are to analyze the methods used to prepare the budget to actuals – for example,

· Which financial statements do they present these comparisons for?

· Do they compare the original budget or year-end amended budget?

· Are the variance positive or negative?

· What does this indicate for the town of Winston-Salem?

Second,

· What is the basis of accounting used for the budget?

· What is the basis of accounting used for the financial statements?

Analyze the sources of revenue on the selected local government. Include information on both governmental and business-type activities. Examine property taxes and how they are accounted for.

This question is asking for the sources of revenue for Winston-Salem, NC for both governmental activities and business types of activities. It is the first of six questions about sources of revenue. This one is asking about property taxes and how they are accounted for. For example,

· What percentage of revenues are from property taxes/

· Property tax rate statistics – rate, per capita, etc.

· Are they accounted for on the cash basis, modified accrual basis, or accrual basis? Explain what that means for Winston-Salem.

Examine other sources identified as primary revenue for the entity.

The second question is asking about other sources (other than property taxes) of revenue for Winston-Salem, NC for both governmental and business-type activities. It is looking for the ones that are primary sources of revenue for Winston-Salem, NC.

Examine deferred revenue.

The third question ask about deferred revenue. Does Winston-Salem have any? If so, what is it from? This analysis should include both governmental activities and business-type activities. How does the financial statement reader know about it?

Examine year-to-year variations in the tax levels of income.

The fourth question ask you to examine the year-to-year variations in the tax levels of income. Hint: You can find this information in the statistical section.

Examine various management discussion and analysis items of note.

The fifth question ask you for information provided in the management discussion and analysis about the sources of revenue (for both governmental and business-type activities) for the town of Winston-Salem, NC.

Examine information about the general fund.

The sixth question ask you for information about the general fund. Remember these questions are about the sources of revenue for Winston-Salem, NC. For example,

· What are the sources of revenue for the General Fund?

· How much (percentages) comes from property taxes? Sales taxes? Etc.

Clarity, writing mechanics, and formatting requirements.

Run you paper through a grammar checker, like Grammarly to correct spelling errors, typos, and grammatical errors.