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Annual Report 2013-2014

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Glossary

Accountability is traditionally established when Parliament confers responsibility on public sector agencies to account through a Minister of the Crown for all that is done in the exercise of their authority, the manner in which it is done and the ends sought to be achieved.

Accrual Accounting provides information on the effects of transactions and other events when they occur rather than when cash or its equivalent is received or paid, and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate.

Across Government Benchmarking Audits build on the annual assurance audits and are aimed at providing an indication to Parliament and agency management of how agencies are performing relative to each other on selected key control activities.

Agency means a department, a sub-department or a statutory authority as defined in the Financial Management Act 2006.

Annual Report on State Finances is a report prepared in accordance with the Government Financial Responsibility Act 2000 that provides the State’s public sector financial results for the financial year and outlines material differences between these results and the financial projections contained in the State Budget for that financial year.

Assurance Audit or Financial Audit is work performed to enable an opinion to be expressed on the financial statements of an entity. For most agencies, it also includes audit work to enable an opinion to be expressed on their controls and key performance indicators.

Audit includes to examine, investigate, inspect and review.

Audit General’s Report is the vehicle used to report to Parliament the results of audits and examinations conducted under sections 12 to 20 of the Auditor General Act 2006.

Australian Equivalents to International Financial Reporting Standards (AIFRS) are Accounting Standards issued by the Australian Accounting Standards Board (AASB) that are equivalent to Accounting Standards issued by the International Accounting Standards Board (IASB).

Compliance Audits are audits that provide information about agency compliance with legislation, public sector policies and good practice.

Corporate Entities operate under enabling legislation in a similar manner to companies under the Corporations Act 2001.

Department means a department of the public sector established under the Public Sector Management Act 1994.

Direct Reporting Engagement where the assurance practitioner directly evaluates or measures an entity’s activities and expresses a conclusion in a written report.

Effectiveness Indicators are key performance indicators that provide information on the extent to which agency level government desired outcomes have been achieved, or contributed to, through the delivery of services.

Efficiency Indicators are key performance indicators that generally relate services to the level of resource inputs required to deliver them.

Entrance Interviews are formal meetings with senior management of agencies and other entities conducted during the audit planning phase to provide the opportunity to canvass with management issues of importance and to explore the proposed audit emphasis and areas of coverage.

Exit Interviews are formal meetings with senior management of agencies and other entities at the final stage of audits and examinations to confirm understandings and to explain audit findings and conclusions

Financial Statements are structured set of financial information including explanatory notes derived from accounting records to communicate for a period of time an entity’s financial performance and cash flows, and at a point of time its financial position, that is useful to a wide range of users in making economic decisions.

A Follow-up Audit reviews the extent to which recommendations from the previous performance audit have been implemented, generally three to five years after tabling.

A Follow-on Audit reviews the progress in implementing recommendations from a previous report and has additional scope in covering significant issues or developments in the area or program.

Follow the Dollar Audits look at how government grants are being spent by receiving non public sector organisations.

Key Performance Indicators (KPI) is information about critical or material aspects of service performance or outcome achievement.

Key Performance Indicator Audit is an audit performed to enable an opinion to be expressed about whether or not the key performance indicators are relevant and appropriate having regard to their purpose and fairly represent indicated performance.

Management Letter is a letter to senior management of an agency or other entity that conveys the audit findings and results of an audit.

Materiality is the characteristic based on the size and /or nature of an omission or misstatement of accounting, performance or compliance information that, in the light of context or circumstances, has the potential to adversely affect the economic decisions of users of the information or the discharge of accountability by senior management.

Matters of Significance (MoS) are the ‘key messages’ in Auditor General’s reports. ‘key messages’ are defined as the issues a general parliamentary reader would take away from the report after the detail of specific findings and recommendations has receded into the background.

Modified Audit Opinion is expressed when, based on the audit evidence obtained, or where sufficient appropriate audit evidence is unable to be obtained, the financial statements are not free from material misstatement, or where the key performance indicators are not relevant or appropriate or do not fairly represent indicated performance, or where controls are inadequate.

Outcomes are the effect, impact, result on or consequence for the community, environment or target clients of government services.

Performance Audits (PA) are audits that examine efficiency and effectiveness of public sector agencies or specific areas within an agency or across a number of agencies.

Service means the supply of an activity or good to a user external to the entity providing the service. Services comprise programs and outputs.

Significance is the relative importance in the circumstances, in relation to audit objectives, of an item, event or information, or problem the auditor identifies.

Statutory Authority means a person or body specified in Schedule 1 of the Financial Management Act 2006. These agencies are established by Parliament under legislation for specified purposes.

Sub-department means an entity in respect of which a declaration under section 56(2) of the Financial Management Act 2006 has effect.

Treasurer’s Instructions are prescribed requirements at a minimum level with respect to matters of financial administration that have the force of law and must be observed by public sector agencies under the Financial Management Act 2006.

Unmodified Audit Opinion is expressed when the audit concludes, based on the audit evidence obtained, that, in all material respects, the financial statements are free from material misstatement, the key performance indicators are relevant and appropriate and fairly represent indicated performance, or controls are adequate.

Working Papers are documents that record the auditor’s planning, the audit procedures performed, the audit evidence obtained, the auditor’s findings and the conclusions drawn for an audit.

Page last updated: August 20, 2014

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