16.4.6 Exception Ratings
16.4.6 Exception Ratings
(Last Modified on August 14, 2020)
Individual ratings are assigned to each assurance engagement observation contained in reports issued. All issues are included in the audit report but “Comments” are not presented in a full audit finding format. The scales for the USG Internal Audit rating systems are listed below.
Report Item Rating Scale
- Advisory (Consulting Engagements only)
- Categorized by area reviewed
- Used to identify recommendations contained in a consulting engagement report
Assurance Engagements Rating Scale
| Likelihood | Impact/Magnitude | ||
|---|---|---|---|
| Low | Medium | High | |
| Not Likely | No Issue | Comment | Moderate |
| Likely | Moderate | Significant | Material |
- No Issue
- Engagement Team did not identify any reportable issue
- Comments
- Nominal or minor violations of procedures, rules, or regulations.
- Issue(s) identified are not likely but could have a medium impact on the organization.
- Minor opportunities for improvement.
- Not included in report but are communicated to management during the exit conference or at the end of the engagement.
- Moderate
- Violation of policies/procedures/laws and/or lack of internal controls that either does or could pose a notable level of exposure to the organization.
- Issue(s) identified are (a) either not likely but could have a high impact or are (b) likely and could have a low impact on the organization.
- Notable opportunities to improve effectiveness and efficiency exist.
- Corrective action is needed by management in order to address the noted concern and reduce risks to a more desirable level.
- Significant
- Violation of policies/procedures/laws, and/or lack of internal controls that either does or could pose a substantial level of exposure to the organization.
- Issue or issues identified are likely and could have a medium impact on the organization.
- Substantial opportunities to improve effectiveness and efficiency exist.
- Prompt corrective action by management is essential in order to address the noted concern(s) and reduce the risk to the organization.
- Material
- Violation of policies/procedures/laws and/or unacceptable level of internal controls that either does or could pose an unacceptable level of exposure to the organization.
- Issue or issues identified are likely and could have high impact on the organization.
- Major opportunities to improve effectiveness and efficiency exist.
- Immediate corrective action by management is required.
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