Based on each of the following scenarios below, draft an effective finding for the Management Letter. Five Components of an effective finding:

1. Rate the significance of the deficiency/issue, considering any compensating controls/factors:
   1. Financial statement audit ratings: control deficiency, significant deficiency, or material weakness
   2. Operational audit ratings: low, medium, or high risk based on stakeholder/user response.
   3. Compliance audit ratings: in compliance or out of compliance.
2. Explain what the issue/deficiency is
3. Explain why the issue is a problem answer the So what/why should I care? question
4. Make recommendations

5. Explain how your recommendations will benefit them answer the How will this help me/why is it worth my time to fix? question.

Write one paragraph for each scenario:

1. During an operational audit of special collections items at a University, the auditor discovered that an old coin listed on the inventory list was missing. The total value of the coin was estimated to be $5.
2. During an operational audit of the Cashiers office at a University, the auditors discovered two bags stored in the safe from the special collections department. The content of the bags was unknown and were not recorded in the accounting system.
3. During an operational audit of a University department, it was discovered that four new vehicles had been purchased in January, but had not yet been insured by the time the audit occurred in April. The vehicles had been driven approximately 3,000 miles during that time.
4. During a financial audit of investments, the auditors discovered that the book value for several investments had been reported instead of the fair market value. This error resulted in an understatement of investments of approximately $300,000. The total investment balance was approximately $89 million.
5. During a compliance audit, the auditor discovered that the credit card statement for a University athletic coach had two transactions on the same day with Mariott hotels in San Francisco, CA for $4,999 and $2,154, respectively. For fraud prevention purposes, the University and the State of Utah both have strict policies forbidding the circumvention of single transaction limits by splitting transactions into smaller pieces, with the penalty being immediate loss of credit card privileges and potential loss of employment. The University does have procedures that allow single transaction limits to be raised for short periods of time if the purpose is justifiable and approved in advance by the Purchasing office. Upon further inquiry, the auditor discovers that because the charge occurred on a weekend and the coach did not make prior arrangements to raise his limit with the Universitys Purchasing office, he instructed the hotel to separate the transaction into two smaller amounts and swipe his University credit card twice because the total cost was over his single transaction limit of $5,000. The coach needs a credit card to do his job.