Financial auditing

Overview of the financial audit process

A ‘financial audit’ refers to an audit of the financial statements of an entity:

  • A financial audit provides assurance that the financial statements of an entity present fairly the financial position, cash flows and results of operations for the year, in accordance with relevant financial reporting frameworks and standards.
  • Some entities are also required to produce audited performance statements, which contain performance indicators for the entity. We conduct these at the same time as financial statement audits.

Process

An audit strategy is developed for each agency, based on an assessment of existing management controls and organisational and environmental risks. Financial audits are conducted in accordance with professional auditing standards using a risk-based methodology. At the end of the audit, the entity is issued with an opinion on its financial statements, which the entity includes in its annual report.

Delivery

Financial audits are undertaken for around 550 public sector entities each year. Around a third of these are undertaken by VAGO staff. The remainder are undertaken by private sector firms—audit service providers—contracted by the Auditor-General. VAGO reviews this work and the Auditor-General signs the opinion.

Reporting

The Auditor-General reports on the results of financial audits.

Estimated Financial Statements

The financial audit group also conducts a review of the state’s Estimated Financial Statements and our review opinion is included in the state’s Budget Papers.

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Last updated on 31/08/2016