Sorry guys, cannot reply
A motoring accident has left me batered and bruised and the painkiller have humbed my brain
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Hope you feel better soon. Sorry to hear of your accident. Was anyone else hurt?
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Divitas,
OUCH! and sorry.
david fb
(blind crazy automobiles tried to kill me on my motorcycle twice)
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Hi Leap 1, thanks for the kind words. No one else injured, and the drunk who hit me walked away without a scratch (but in handcuffs).
At least I’ve had a bit of time to do some reading.
The link to The Mint took me to the reports section where I looked at the latest set of ‘Audited’ Accounts produced by my old firm KPMG – I trained as a Chartered Accountant with them many years ago (US = CPA). I’m not sure if you know much about auditing but an audit is an expression of opinion on the accuracy of a set of accounts. If you cannot get information or are unhappy about something, then you say so in your report. Whoever wrote KPMG’s audit report for The Mint deserves The Nobel prize for Literature – it basically gives no opinion on anything other than saying the accounts comply with current reporting requirements:
“Required Supplementary Information
We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Report on Internal Control Over Financial Reporting
Accordingly, we do not express an opinion on the effectiveness of the United States Mint’s internal control.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the United States Mint’s financial statements as of and for the year ended September 30, 2022 are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
Purpose of the Reporting Required by Government Auditing Standards
The purpose of the communication described in the Report on Internal Control Over Financial Reporting and the Report on Compliance and Other Matters sections is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the United States Mint’s internal control or compliance. Accordingly, this communication is not suitable for any other purpose.”
Before I became an FCA I was a very junior lecturer in economics at a British University. The job was a bit of a pain to say the least, but I did enjoy the research. So, of I went researching:
Looking back in time I came across an alleged sleight of hand with past accounts. This quote came from the original 2005 Accounts and has now vanished according to Fort Knox researcher Tom Szabo:
…We [KPMG] did not audit the United States’ gold and silver reserves (Custodial Gold and Silver Reserves) for which this Mint serves as custodian. These reserves were audited by to United States Department of the Treasury, Office of Inspector General (OIG) whose report has been furnished to us, and our opinion, insofar as it relates to these reserves, is based solely on the report of the OIG.”**
The 2005 Accounts were withdrawn as they contained ‘material errors’ – ie, they told the truth:
Now, not doing an outside audit is believable as an audit of gold at The Mint would have had an army of auditors wandering around the place doing tests, asking questions, examining paperwork, test counts, etc. They could, of course, find out things that were better left unfound!
The reliance of The Mint’s own figures is a requirement of the contract between The Mint and KPMG:
“Basically, audit standards allow, in appropriate circumstances, reliance on other audit work, and in the specific context of KPMG’s financial statement audit of the Mint, the agreement calls for their reliance on our gold reserves work, without specific reference to it. Hope this helps.
- KPMG relies upon our audit … and—therefore—KPMG doesn’t make reference to the audit that we performed (our report) in their audit report.
- Reliance upon our audit is a requirement stated in the Treasury Contract *;
- In order for KPMG to assume responsibility for our work, KPMG reviews our work in accordance with Auditing Standards (AU-C §600, Special Considerations—Audits of Group Financial Statements, Including the Work of Component Auditors; see attached) and the Yellow Book (the methodology contained in FAM 650; see attached);”
So, there are figures produced but there is no independent audit or report on the gold held by the US government and until there is I don’t believe them.
This has certainly got my audit nose twitching. When it comes to money. I don’t trust governments or banks and as for auditors:
Cynical perhaps, but my cynicism has served me very well over past years 
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That was one point in time 2005. It was not an admonishment of the OIG.
This is a much later point in time where and audit was done. There is no admonishment this time either. The mint is very specific that only a few bores are done in an audit. The quality of the gold gets a very minor inspection.
The audits are done. You may criticize the audits but you have nothing to do with the audits. The disclaimers are completely straightforward as are the means of testing a minor amount of the gold. You are not expecting bores of each bar of gold?
There is nothing stating the bars were not individually counted for the audit. There is nothing stating the bars were not individually weighted for the audit. There are no admonishments of any sort. It would be highly unethical in 2022 for KPMG to audit the gold write a disclaimer and not make such admonishments were they to occur again not weighting and counting the bars of gold. This is not the first nor nearly the last time the audits have indeed happened.
Again your sources that run ads to buy and sell gold are complete liars.
Since I couldn’t find that up thread, here is a link to the US Mint’s audited financial statements for the year ended 9/30/22:
(Edit: Oh - there’s the link at the very bottom of the material you quoted. Well, I’ve got it here again. Not the end of the world.)
Several other years are available here:
With that reference material at hand, let’s move on.
Since I am a CPA in the US, I’ve got more than a passing familiarity with financial statements. And you are quite correct, audited financial statements will include a letter where the auditor expresses an opinion on the financial statements.
If you look at page 38 of the Annual Report PDF linked above (which is page 40 in the PDF itself), you’ll find where the auditors expressed their opinion, as follows:
We have audited the financial statements of the United States Mint, which comprise the balance sheets as of September 30, 2022 and 2021, and the related statements of net cost, changes in net position, and budgetary resources for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the United States Mint as of September 30, 2022 and 2021, and its net costs, changes in net position, and budgetary resources for the years then ended in accordance with U.S. generally accepted accounting principles.
Since you are a UK Chartered Accountant, you may not be familiar with US CPA audit reports. The above two paragraphs are the standard wording of a clean report. Every CPA in the US can almost recite these words from memory. And I’ll also point out that these are the first two paragraphs of KPMG’s audit report. And they’re under the subtitle “Opinion”. I think that’s pretty clear they are expressing an opinion, even if you aren’t familiar with US audit reports.
Technically, it’s called an “unqualified opinion,” which is terribly confusing for most lay readers. What that means is that the auditor has given their opinion without qualifications. There are no restrictions, no need for the words “but” or “except”, in their opinion. They don’t have to say “Except for X, the accompanying financial statements present fairly…”
Ummm. No. Not even close. As I noted above, KPMG did give their opinion on the statements. And their opinion was that the statements were fairly presented, in all material respects.
What you pulled out was some details further down the auditor’s report. For those who didn’t look at the link, here are all of the section headings in KPMG’s letter:
Opinion
Basis for Opinion
Responsibilities of Management for the Financial Statements
Auditors’ Responsibilities for the Audit of the Financial Statements
[and on to page 2 of the letter]
Required Supplementary Information
Other Information
Report In Internal Control Over Financial Reporting
[page 3]
Report on Compliance oand Other Matters
Purpose of the Reporting Required by Government Auditing Standards
So you skipped over the entire first page of the letter and pulled two little bits out of the second and third pages. Perhaps we should put those bits into context.
*Required Supplementary Information *
U.S. generally accepted accounting principles require that the information in the Management’s Discussion and Analysis and Required Supplementary Information sections be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Federal Accounting Standards Advisory Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audits of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
So US GAAP requires some supplementary information to be included with the basic financial statements. That supplementary information is not part of the financial statements, but helps put the basic financial statements in context. The auditors did not perform a full audit of this supplementary information, but they did do some limited audit procedures on them. (These limited procedures are done to look for gross errors or obvious misrepresentations by management. --Peter) So because the auditors did not do a full audit of this information, they are not expressing an opinion on it.
In short, the supplementary information wasn’t audited, so there is no audit opinion on that part of the annual report.
How about Internal Control? Again, you skipped a lot of context:
In planning and performing our audit of the financial statements as of and for the year ended September 30, 2022, we considered the United States Mint’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the United States Mint’s internal control. Accordingly, we do not express an opinion on the effectiveness of the United States Mint’s internal control.
Once again, the auditors are not auditing internal controls. They only test certain internal controls so the auditors can design their own audit procedures to be more efficient and effective.
As a Chartered Accountant, I’d expect you to be familiar with this concept. I’m sure it’s fairly universal world wide. The basic idea is to use the internal controls to guide where more or less time needs to be spent in the audit. If there are good internal controls, the auditor only needs to test compliance with those controls. If there is good compliance, the probability of materials errors in the financial statements is acceptably low. If compliance is poor, then additional audit time will need to be spent in that area, as the internal controls cannot be relied upon. On the other hand, if the internal controls themselves are poor, there is no need to test compliance. Instead, the auditor must spend time checking that area directly to look for material errors or omissions.
On the compliance and other matters, you left out the last sentence:
The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards or OMB Bulletin No. 22-01.
Once again, this audit was not an audit of compliance with these enumerated items. It is an audit of the financial statements. While the auditors did look at some compliance matters, it would only be those that might have an effect on the financial statements.
You did fully quote that last “Purpose” paragraph. I think the additional context I’ve provided will allow the reader to understand this paragraph pretty well.
Alleged is the operative word here. Anyone can allege anything. But the paragraph you quote explains things pretty well.
We [KPMG] did not audit the United States’ gold and silver reserves (Custodial Gold and Silver Reserves) for which this Mint serves as custodian. These reserves were audited by to [sic] United States Department of the Treasury, Office of Inspector General (OIG) whose report has been furnished to us, and our opinion, insofar as it relates to these reserves, is based solely on the report of the OIG.
Once again, fairly standard audit wording for that time. If you were to dig out the full auditor’s report, it might have a qualified opinion - an opinion with a qualification. Something like:
Except for Custodial Gold and Silver Reserves, the accompanying financial statements present fairly …
It appears the auditors did not directly audit those reserves in that year. Instead, they relied on the work of other auditors - the Treasury’s Office of Inspector General in this case. That doesn’t mean there is a problem with those reserves. It only means that KPMG did not audit them.
Interestingly, this comment is absent from the current auditor’s report. That would imply to me that KPMG did audit those reserves for themselves rather than rely solely on the Treasury OIG. And I make this statement in spite of your later unsupported quote about the audit agreement between KPMG and the US Mint.
As to the rest of your allegations, they are nothing more than pure speculation. I’ll ignore them.
I’ll also pass over much of your misunderstanding of US auditor’s reports out of professional courtesy. It appears you lack the intimate familiarity of US audit reports that CPA’s in the US have. Hopefully, this has helped you learn a bit more about your colleagues and our work on the other side of the pond.
–Peter
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Fair point to make. I’m looking at it from a UK perspective and my old firm KPMG does have a certain reputation in the UK. I’ve just seen that it was the auditor of Silicon Valley Bank
SVB was not just sitting in a vault year after year.
You have nothing substantial as to why the gold is not there. I get you have the word of bloggers selling ad space to buy and sell gold. You have nothing. You have been listening to liars.
I have a ‘gut’ feeling that something isn’t right. My feeling and instincts have served me exceptionally well over the years so I’ll go with them.
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But is that gut feeling fed by reliable sources? Or fed by conspiracy forces whose intent is to lead you to specific conclusions and make certain investment decisions?
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Whatever it is it has served me very well over a long period of time. We are given instincts for a reason apparently:
When you have a lot of experience in a certain area, the brain has more information to match the current experience against. This makes your intuitions more reliable. This means that, as with creativity your intuition can actually improve with experience.
When it comes to listening to governments and banks my bull**** monitor goes to a very high level 
Basically you have opinions and no facts.
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Gut feelings are terrific for many human circumstances, but for economic and investment analyses? Are you out of your mind? No, just echoing investment professional hawks (QUANTS) eagerly searching for flocks of eager confident gut investor rabbits.
Nope.
david fb
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Gut feelings are I bought xyz at $10 and now it is $15. Lets say that is a first time happening starting out. Then you believe in that behavior. The behavior in fact is unproven.
It could be your one to three times right out of ten is not very good. Whereas someone doing other things much better studied is getting 7 things out of ten right.
Since there are things wrong not just right in the ten the 3 or less is really bad. Just a matter of time till when it is bad.