In one of the most strongly worded papers ever issued by the organisation, it blasted the Scottish Government for its failed IT system which will cost £178 million, and raised the prospect of the EU issuing fines of up to £125 million.
Today, the Scottish Conservatives have repeated their calls for a full investigation into the failings, which have starved the rural economy of hundreds of millions of pounds.
Around a quarter of farmers are still to receive any payment, despite the Scottish Government saying money would begin arriving in December last year.
And today, in a radio interview with the BBC's Good Morning Scotland, deputy First Minister John Swinney appeared to blame the EU and the farming industry itself, rather than taking responsibility for his party's role in the matter.
Scottish Conservative North East MSP Peter Chapman said:
"The SNP had two years to sort this out and it still couldn't manage it.
"The Audit Scotland report is among the most damning ever to be produced by the organisation, and it echoes what communities across rural Scotland have been saying for some time.
"But instead of taking responsibility, John Swinney has opted to suggest the industry only has itself to blame.
"That's a disgraceful conclusion to draw, and farmers will not forget this episode which has starved the rural economy of hundreds of millions of pounds.
"This is exactly why a full investigation is required, because we cannot risk any kind of repeat.
"It's essential the Scottish Government sorts this out to ensure all farmers are paid and we are not in the position of being fined by the EU over this."