Responsibility of public sector entities to achieve their objectives in the reliability of financial reporting; effectiveness and efficiency of operations; compliance with applicable laws; and reporting to interested parties.
An item or resource controlled by an entity that will be used to generate future economic benefits.
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 the 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.
The period of a year beginning with 1 January and ending with 31 December.
Clear audit opinion
A positive written expression provided when the financial report has been prepared, which fairly presents 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 the reliability of its financial reporting, the effectiveness and efficiency of its operations, and compliance with applicable laws and regulations.
Those that universities receive benefits from and are able to influence the extent of those benefits through any rights they have to direct the activities of those entities.
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.
Systematic allocation of the value of an asset over its expected useful life, recorded as an expense.
Disclaimer of opinion
Statement 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.
Error in the financial statements that affects the understanding of the accounts but does not directly impact the income statement and/or balance sheet.
Removing the effect of transactions between entities when preparing consolidated financial statements.
Emphasis of matter
A paragraph included in an audit opinion that refers to a matter appropriately presented or disclosed in the financial report that, in the auditor’s judgement, is of such importance that it is fundamental to the users’ understanding of that report.
A corporate or unincorporated body that has a public function to exercise on behalf of the state or that 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.
Financial Management Act 1994
Victorian legislation governing public sector entities, as determined by the Assistant Treasurer, including their financial reporting framework.
A document reporting the financial outcome and position of an entity for a financial year. It contains an entity’s financial statements, including a comprehensive income statement, a balance sheet, a cashflow 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 administer and monitor an entity’s activities to achieve its strategic and operational goals.
The inflow of assets or decrease of liabilities during the financial year, including receipt of cash and the reduction of a provision.
A method of directing, monitoring and measuring an entity’s resources and processes to prevent and detect error and fraud.
The expenditure of funds intended to result in medium- to long-term service and/or financial benefits arising from the development and/or use of infrastructure assets by either the public or private sectors.
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.
A ratio that compares cash and other assets that are expected to convert to cash within 12 months, to liabilities that are payable within 12 months. A value of 1.0 or greater generally indicates that an entity is likely to be able to meet its short-term obligations.
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 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 the 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 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.
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 audit opinion is considered to be unqualified except for the effects of the matter that relates to the qualification.
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.