Assurance

Our financial audits provide assurance to parliament
419 financial audits and 98 other assurance audits and reviews completed
13 new modified audit opinions issued

Providing an independent opinion

Parliament requires reliable information on the operation of NSW public sector agencies. We provide parliament with independent audit opinions on agencies’ financial statements, increasing their reliability and credibility. Our audits comply with professional quality and independence requirements as parliament needs to be assured our audits are independent. Our mandate further assures our independence by restricting us from providing non-audit services that other accounting firms provide.

We completed 419 financial audits this year compared to 436 last year.

In addition to audits of individual agencies, we audit the financial statements at the whole-of-government level, the Total State Sector Accounts. These accounts provide financial information to parliament on a State-wide basis, for example total State borrowings.

We also provided 98 other assurance audits and reviews (70 last year) to help agencies attest compliance or acquit their grant revenues. The Treasurer requested we review the annual budget process in 2015–16. Our review focused on the reasonableness of estimates and forecasts used by NSW Treasury in preparing the 2016–17 Budget Papers.

 

Number of audited entities
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2013

 

2014

 

2015

 

2016

 

The year ahead

In 2016–17, we will continue to provide assurance to parliament by focusing on the following in our ‘Influencing for Impact’ strategic initiative:

  • improve engagement with our external stakeholders to ensure our products meet their needs
  • explore alternate audit approaches that improve the relevance, value and impact of our financial and performance audits.

Click here for further details on our strategic initiatives for 2016–17.

Modified auditor's opinions and conclusions

During 2015–16, we issued 18 modified audit opinions and conclusions in our Independent Auditor’s Reports. This represented four per cent of the assurance engagements we conducted. Modified opinions and conclusions included:

  • 3 qualified opinions on agency financial statements
  • 2 qualified opinions on a service organisation’s description of controls, their design and operating effectiveness
  • 4 qualified conclusions on compliance audits
  • 4 adverse conclusions on compliance reviews
  • 5 qualified conclusions on compliance reviews.

Modifications of audit opinions or review conclusions can be qualified, adverse or disclaimed:

  • Qualified opinions and conclusions are issued when financial statements contain material misstatements or sufficient appropriate audit evidence is not available; and the impact is material but not pervasive
  • Adverse opinions and conclusions are issued when misstatements in the financial statements are material and pervasive
  • Disclaimed opinions and conclusions are issued where sufficient appropriate audit evidence is not available and the effects may be material and pervasive.

Repeat modifications

During 2015−16, we repeated five modifications, two fewer than last year. We continue to notify parliament of these modifications and encourage the agencies concerned to act on our recommendations to address the underlying causes.

New modifications

We issued 13 new modified opinions and conclusions in 2015−16.
 

Modified audit opinions and conclusions as a % of total audit opinions
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2013

 

2014

 

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2016

 

Comparing costs with other audit offices

We compare our financial audit costs with other Australian audit offices. In 2015–16, our cost per financial audit opinion was $91,628, nine per cent more than last year. Our cost per financial audit opinion was slightly higher than the average of other Australian audit offices.

Cost per financial audit opinion

Our financial audit volumes

The results of our 2015 financial statement audits were reported to parliament in 13 volumes of the Financial Audit Auditor-General’s Report to Parliament in 2015–16.

One volume focused on major themes from audits in the previous calendar year, while another focused on members of parliament and their entitlements. The remainder focused on a particular cluster or industry in the current year. All volumes included significant issues and activities broadly classified into four areas: financial and performance reporting, financial controls, governance, and service delivery.

Volumes published covered:

  • Education and Communities
  • Electricity
  • Family and Community Services
  • Health
  • Law, Order and Emergency Services
  • Planning and Environment
  • Premier and Cabinet
  • Trade and Investment, TAFE and Water
  • Transport
  • Treasury and State Finances
  • Universities.

Timeliness of reporting to parliament

We recognise parliament and other stakeholders need timely reports to allow prompt scrutiny of agencies’ financial position and performance. For agencies with a 30 June balance date (most of our clients) our internal benchmark is to report to parliament before the end of the calendar year. Our other financial audits (mainly universities) have a 31 December balance date and our reporting to parliament benchmark is by the end of May each year.

Financial audit reports to parliament
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2013

 

2014

 

2015

 

2016

 

2017 TARGET

 

2012

 

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2017 TARGET