The first phase of the audit focused on potential overcharges associated with the fraudulent transactions identified by federal investigators and an assessment of the internalcontrols surrounding the fraudulent transactions.
During the last four years, Deloitte has issued non-qualified audit opinions on the financial statements, in spite of ongoing material weaknesses in internalcontrols over their financial reporting.
But all the firms quickly saw that they could now charge a lot more for the audit itself given the new requirement for a separate opinion on internalcontrols over financial reporting and the amount of work some sloppy companies had to do to document, test, and confirm internalcontrols.