Responsibility of public entities to achieve their objectives in reliability of financial reporting, effectiveness and efficiency of operations, compliance with applicable laws, and reporting to interested parties.
An audit opinion expressed if the auditor has sufficient appropriate audit evidence and concludes that misstatements, individually and in aggregate, are both material and pervasive in the financial report.
The systematic allocation of the depreciable amount of an intangible asset over its expected useful life.
An item or resource controlled by an entity that will be used to generate economic benefits.
The fair value of a non-current asset on a specified date.
Audit Act 1994
Victorian legislation establishing the Auditor-General's operating powers and responsibilities and detailing the nature and scope of audits that the Auditor‑General may carry out.
Helps a governing board to fulfil its governance and oversight responsibilities and strengthen accountability of senior management.
A written expression, within a specified framework, indicating the auditor's overall conclusion about a financial (or performance) report based on audit evidence.
A period of a year beginning with January 1 and ending with December 31.
Money an entity spends on:
- new physical assets, including property, infrastructure, plant and equipment
- renewing existing physical assets to extend the service potential or life.
Capital grant/capital purpose income
Government funding for an agency to acquire or build capital assets such as land, buildings or equipment.
The original cost of an asset, less the accumulated amount of any depreciation or amortisation, less the accumulated amount of any asset impairment.
Clear audit opinion
A positive written expression provided when the financial report has been prepared and presents fairly the transactions and balances for the reporting period in keeping with the requirements of the relevant legislation and Australian Accounting Standards. Also referred to as an unqualified audit opinion.
Processes within an entity's governance and management structure that provide reasonable assurance about the achievement of an entity's objectives in reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations.
Corporations Act 2001
Commonwealth legislation governing corporations, including their financial reporting framework.
The rating that credit rating agencies assign to the bonds of an issuer.
An asset that will be sold or realised within 12 months of the end of the financial year being reported on, such as term deposits maturing in three months or stock items available for sale.
A liability that will be settled within 12 months of the end of the financial year being reported on, such as payment of a creditor for services provided to the entity.
Money owed by one party to another party.
When total expenditure is more than total revenue.
Depreciated replacement cost
Current replacement cost less accumulated depreciation to reflect the economic benefits of the assets that have been consumed.
Systematic allocation of the value of an asset over its expected useful life, recorded as an expense.
Disclaimer of opinion
Conclusion expressed if the auditor is unable to obtain sufficient appropriate audit evidence on which to base an audit opinion, and the auditor concludes that the possible effects on the financial (or performance) report of undetected misstatements, if any, could be both material and pervasive.
Removing the effect of transactions between entities when preparing consolidated financial statements.
Emphasis of matter
A paragraph included in an audit opinion of a financial report that refers to a matter appropriately presented or disclosed that, in the auditor's judgement, is of such importance that it is fundamental to users' understanding of the financial report.
A corporate or unincorporated body that has a public function to exercise on behalf of the State or is wholly owned by the State, including departments, statutory authorities, statutory corporations and government business enterprises.
Equity or net assets
Residual interest in the assets of an entity after deducting its liabilities.
The outflow of assets or the depletion of assets an entity controls during the financial year, including expenditure and the depreciation of physical assets. An expense can also be the incurrence of liabilities during the financial year, such as increases to a provision.
The price that would be received if an asset was sold or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date.
A document reporting the financial outcome and position of an entity for a financial year, which contains financial statements, including a comprehensive income statement, a balance sheet, a cash flow statement, a comprehensive statement of equity, and notes.
An entity's ability to manage financial resources so it can meet its current and future spending commitments, while maintaining assets in the condition required to provide services.
A period of 12 months for which a financial report is prepared, which may be a different period to the calendar year.
An entity that is expected to be able to pay its debts when they fall due, and continue in operation without any intention or necessity to liquidate or otherwise wind up its operations.
The control arrangements used to govern and monitor an entity's activities to achieve its strategic and operational goals.
The amount by which the value of an entity's asset exceeds its recoverable value.
The inflow of assets or decrease of liabilities during the financial year, including receipt of cash and the reduction of a provision.
A valuation technique that converts future amounts, such as cash flows or income and expense, to a single current (discounted) amount. The fair value of those future amounts is measured as the value indicated by current market expectations.
An identifiable non-financial asset, controlled by an entity, that cannot be physically seen, such as software licences or a patent.
A function of an entity's governance framework that examines and reports to management on the effectiveness of the entity's risk management, internal controls and governance processes.
A method of directing, monitoring and measuring an entity's resources and processes to prevent and detect error and fraud.
Public or private sector expenditure for the development and/or use of infrastructure assets, intended to result in medium- to long-term service and/or financial benefits.
Weaknesses or other concerns in the governance structure of an entity identified during a financial audit, which are reported to the entity in a management letter.
A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of assets from the entity.
Local Government Act 1989
An Act of the state of Victoria that establishes the:
- purpose of local authorities
- powers that will enable local authorities to meet the needs of their communities
accountable system of local government
- reform of law relating to local government.
A letter the auditor writes to the governing body, the audit committee and the management of an entity outlining issues identified during the financial audit.
Material error or adjustment
An error that may result in the omission or misstatement of information, which could influence the economic decision of users taken on the basis of the financial statements.
Information is material if its omission, misstatement or non-disclosure has the potential to affect the economic decisions of users of the financial report, or the discharge of accountability by management or those charged with governance. The size, value and nature of the information and the circumstances of its omission or misstatement help in deciding how material it is.
The auditor's expressed qualified opinion, adverse opinion or disclaimer of opinion.
The value that an entity has earned or lost over the stated period—usually a financial year—calculated by subtracting an entity's total expenses from its total revenue for that period.
An asset that will be sold or realised later than 12 months after the end of the financial year being reported on, such as investments with a maturity date of two years or physical assets the entity holds for long-term use.
A liability that will be settled later than 12 months after the end of the financial year being reported on, such as repayments on a five-year loan that are not due in the next 12 months.
Transfers in which an entity receives assets without directly giving equal value in exchange to the other party to the transfer.
Other comprehensive income
Revenues, expenses, gains and losses under Australian Accounting Standards that are excluded from net income on the income statement and are instead listed after net income.
A statement detailing an entity's predetermined performance indicators and targets for the financial year, and the actual results achieved, along with explanations for any significant variations between the actual result and the target.
A non-financial asset that is a tangible item an entity controls, and that will be used by the entity for more than 12 months to generate profit or provide services, such as building, equipment or land.
A current estimate of the present discounted value of the future net cash flows in the normal course of business.
Qualified audit opinion
An opinion issued when the auditor concludes that an unqualified opinion cannot be expressed because of:
- disagreement with those charged with governance or
- conflict between applicable financial reporting frameworks or
- limitation of scope.
A qualified opinion is considered to be unqualified except for the effects of the matter that relates to the qualification.
A statutory defined period that reflects all of the financial/operational activities that took place during that time.
Relevant measures and indicators
Measures and indicators an entity uses if they have a logical and consistent relationship to its objectives and are linked to the outcomes to be achieved.
The restatement of a value of non-current assets at a particular point in time.
Inflows of funds or other assets or savings in outflows of service potential, or future economic benefits in the form of increases in assets or reductions in liabilities of an entity, other than those relating to contributions by owners, that result in an increase in equity during the reporting period.
The chance of a negative or positive impact on the objectives, outputs or outcomes of an entity.
A tool an entity uses to help identify, monitor and mitigate risks. The register may appear in the form of a plot graph or a table.
Specific purpose funds/specific purpose grants
Grant funding provided by the Commonwealth to the state government for a particular area or service.
A document an entity provides to its staff and board to communicate its organisational goals, the actions needed to achieve those goals and other critical elements developed during the planning exercise.
The audit opinion that the auditor expresses when concluding that the financial (or performance) report is prepared, in all material respects, in keeping with the applicable reporting framework.
The cost to buy or construct an asset, plus the cost of maintaining the asset over its life.